GARY TALKS HOME DEPOT

Today, Home Depot’s stock gapped up out of a long trading range. Volume was about 3x average volume. This is the type of reaction that automatically goes onto our radar screen. It does not mean it has to work. But from our studies of the markets, whenever action like this occurs, it is a wake-up call. The gap broke it out of resistance (give or take $1) that capped the stock for approximately 10 months. We consider this akin to a breakaway gap. On occasion, the stock will just keep going but most often, the move will stall. This enables the stock to digest the move, take in a little profit taking, before potentially moving higher. This would show itself by the stock sitting around for a bit, either putting in a flag-like pattern or slightly pulling back on lower volume. One would then look for another higher volume day as it moves through those highs. We are not advocating buying, selling ort holding this stock. We are just saying it now goes onto our radar.