Hey Trader,

Yesterday, here in the new, improved Pit Report, Mark gave his overview of Home Depot (Ticker: HD).

Now it’s my turn to run it through the charts!

And I’ll say this: the HD chart is giving us mixed signals.

As you can see, it has been trading in a range from $311.55 to $328.90 for most of the last two months, with the exception of a quick two-day trip up to $347.25.

Wednesday it busted out above the mini range it had been trading in the last two weeks, holding resistance at $322.

On Thursday, HD closed above the higher resistance level looking like it is ready to take off to the upside:

Closing over that resistance line is a bullish signal and the volume profile looks wide open.

But, the candle that was formed on Thursday could become a hanging man formation.

A hanging man is a candle found at the top of an uptrend and signals a possibility of an end to that trend.

HD has been in a bit of an uptrend since the low of $309 on Jan. 6

As long as HD holds that support level at $328, it looks like it is clear to trade higher on the volume profit with that previous high $344-$347 being the next target.

If the hanging man candle pans out and HD opens lower and trades below the $328 level, the downside support levels come in at $320, the 50-day moving average at $315.57 and $311.

Either way, you can make money above or below $328.

What’s really nice about this is you know where to have your stop-loss levels.

Trade accordingly.

Licia Leslie