Volume Spike Investor

The Home Depot Inc. (NYSE: HD) is seeing a major move today, although not so much on news.  This appears to be a technical indictor more than anything since the stock has broken above its key 200-day moving average.  Just late last week the stock broke above a 50-day moving average as well now that shares are up over 7% at $28.30 at 1:00 PM EST.  Its current 50-day moving average now is $24.71 and the 200-day moving average is $26.90.

The same thing is happening over at Lowe’s as its shares are also up over 7% at $24.45.
Its 50-day moving average is $21.43 and the 200-day moving average is $23.11.

With two storms in the Atlantic that are expected to be storm threats to the U.S. out a week, there might even be some investor hopes that the building materials companies might actually get to seel to all the coastal homes that are already owned whether owners want to spend or not.

Maybe the stock market really is learning how to remember that it is supposed to discount certain trends by 2 or 3 quarters in advance.  Lowe’s has just crossed over the daily average volume, but DJIA component Home Depot has already traded 1.5-times its average daily volume.

Jon C. Ogg
August 11, 2008