Account

New to ADSS? Open an
account now to get started.

OR

Already have an account?

Add funds to your ADSS account

Account

New to ADSS? Open an
account now to get started.

Add funds to your ADSS account

Trends & Analysis
News

P&G shares rise despite Q3 sales miss

News

Gold continues to shine amid geopolitical worries

News

Crude oil dips for 3rd session after supply data

News

Is there an AI upside for AMD?

News

GBP/USD recovers following wage report

News

Buy the JPMorgan dip?

Trends & Analysis
News

P&G shares rise despite Q3 sales miss

News

Gold continues to shine amid geopolitical worries

News

Crude oil dips for 3rd session after supply data

News

Is there an AI upside for AMD?

News

GBP/USD recovers following wage report

News

Buy the JPMorgan dip?

Asset Watch

Is Home Depot a source of alpha?

Tuesday, October 17, 2023

With rapidly rising interest rates creating headwinds for the U.S. housing sector, homebuilders have suffered mightily. Higher Treasury yields precede higher mortgage rates, which stifles demand for new and existing homes.

 

However, despite plenty of carnage, Citigroup told clients on Oct. 13 that homebuilder stocks are ripe for a relative rally. Analysing 55 single-day declines of more than 5%, the team found housing stocks outperform the S&P 500 58% of the time over the next 30 days, 69% of the time over the next 90 days, and 78% of the time over the next 180 days.

 

And as Home Depot suffers from the same affliction, could a comeback be in the cards over the medium term?

The stock’s 200-week moving average has been a major support level since mid-to-late 2022, and a close below the milestone occurred in March 2023 before a profound rally. Similarly, Home Depot closed below its 200-week MA two weeks ago, and an intraweek rally above it was rejected last week.

If Home Depot can recoup its 200-week MA during the homebuilders’ next upswing, it could encourage a move back above $330.

So, is Citigroup on to something, or will higher U.S. Treasury yields continue to hammer Home Depot?


Site by Pink Green
© ADSS 2024


Investing in CFDs involves a high degree of risk that you will lose your money due to the use of leverage, particularly in fast moving markets, where a relatively small movement in the price can lead to a proportionately larger movement in the value of your investment. This can result in loses that exceed the funds in your account. You should consider whether you understand how CFDs work and you should seek independent advice if necessary.

ADS Securities LLC (“ADSS”) is authorised and regulated by the Securities and Commodities Authority (“SCA”) in the United Arab Emirates as a trading broker for Over the Counter (“OTC”) Derivatives contracts and foreign exchange spot markets. ADSS is a limited liability company incorporated under United Arab Emirates law. The company is registered with the Department of Economic Development of Abu Dhabi (No. 1190047) and has its principal place of business at 8th Floor, CI Tower, Corniche Road, P.O. Box 93894, Abu Dhabi, United Arab Emirates.

The information presented is not directed at residents of any particular country outside the United Arab Emirates and is not intended for distribution to, or use by, any person in any country where the distribution or use is contrary to local law or regulation.

ADSS is an execution only service provider and does not provide advice. ADSS may publish general market commentary from time to time. Where it does, the material published does not constitute advice, or a solicitation, or a recommendation to a transaction in any financial instrument. ADSS accepts no responsibility for any use of the content presented and any consequences of that use. No representation or warranty is given as to the completeness of this information. Anyone acting on the information provided does so at their own risk.