But while Home Depot is up 12% over the last 52 weeks, shares of Whirlpool (WHR) - Get Report are down 27%, with the appliance manufacturer underperforming by 53% in the period. That dynamic may be changing, with Whirlpool starting to make up ground and outperforming Home Depot by 8% year-to-date.
The weekly chart of Whirlpool shows the decline off the 2015 high, back down to the area of the 50% Fibonacci retracement level of its 2012 and 2015 range. Currently, it is above the 38% retracement level and retesting the downtrend line drawn off the highs of the last year. The weekly relative strength index and the money flow index, a relative strength measure of money flow, are both crossing above their centerlines, reflecting positive momentum.
A cup and handle pattern formed on the daily chart as the stock consolidated above the 50% retracement level. The $140 rim line and the 50-day moving average were broken this month, and the move continued on through the 38%, to just below the long-term downtrend line. The aroon indicator designed to identify early changes in trend has made a bullish green-over-red crossover, and daily moving average convergence/divergence, overlaid on a weekly histogram of the oscillator, is above its centerline on both timeframes. Accumulation/distribution is well above its 21-period signal average, and Chaikin money flow has crossed over its centerline. These money flow measures suggest the stock is under accumulation.
Whirlpool has rallied about 15% over the last two weeks and may be ready for a pause. A modest pullback would be a good risk/reward entry point, using a trailing percentage stop.
This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.