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- 1 HD stock price: The stock has been in a bearish trend since the mid-September.
- 2 The stock has underperformed the market by a gap of more than 3 folds.
- 3 See how the company’s revenue has changed with the mortgage rates.
Home Depot, Inc. (LON: HD) is a listed company that facilitates selling building materials and home improvement products. Its products include building materials, home products, lawn and garden products, and decor products.
Why the HD Stock Price is Falling?
Due to a non-favorable change in Mortgage rates and treasury yields, The stock saw a fall in recent times. Mortgage news daily stated that the average rate for a 30-year fixed mortgage had been increased to 7.72%. During the recession, the economy was pumped with money. The mortgage rates declined to near-historic levels in the US. Rising mortgage rates make it more difficult for prospective homebuyers to purchase a new home.
That is a challenge for Home Depot, whose operations depend highly on the housing industry. Home improvements and move-ins sometimes go hand in hand. The prospective sellers are willing to spend money making minor repairs to their houses to get the most outstanding price. As the firm stated in its guidance, investors already anticipated a fall in Home Depot’s sales and profits this year.
The forecasted nightmare came to life
The recent quarterly results show that the Negative forecasters are likely to be proved right. The Revenue declined continuously during the last two quarters, as the company didn’t sacrifice its margins. The wave of this negative growth was followed up by the net profit, which further impacted the earnings per share and returns on equity.
Technical Analysis and Prediction of HD Stock Price
(NYSE: HD): Home Depot stock crumbles under mortgage pressureThe HD stock price broke an uptrend in mid-August. It was the time when the bears reclaimed the resistance level of $332, which is unfazed to this day. However, the bulls tried to break past this point, but after fighting for a month, the HD stock price fell to its immediate support of $288.
The current HD stock price is trading at $295 as the bulls have probably reclaimed the support level. The 50-day exponential moving average price is $312, while the 150-day average is $310.
The price prediction is bullish, and the target price is $326, subject to the bulls breaking past the 50 and 150-day EMA. However, to reverse the trend, the bulls will have to sustain over the resistance level of $332. It is unlikely to happen unless a big move arrives.`
Conclusion
Home Depot, Inc. (LON: HD) is facing a decline in its sales because of certain changes in the mortgage rates and risk-free rates. The HD stock price has fallen due to the fundamentals in recent times. The bulls are trying to reclaim the support level and the prediction is bullish.
Technical Levels
Support: $288, and $267
Resistance: $332, and $361
Disclaimer
The views and opinions stated by the author, or any people named in this article, are for informational purposes only. They do not establish financial, investment, or other advice. Investing in or trading in stocks or related indexes comes with a risk of financial loss.
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
