The American leader in homebuilding materials and improvement products should rebound as it tests its support line.

Financials on the company are encouraging. Indeed sales should rise to $82,700 million this year for a total increase of 5% over prior year figures. Margins are intended to continue in a positive path. Earnings haven’t stopped to improve since 2011 and this trend is meant to be held for the next three years. Its P/E ratio stays reasonable so investors can take profit from the fair valuation of Home Depot shares. Moreover, EPS revisions reflect a positive outlook from analyst polled by Reuters.

Technically, the stock got recently oversold since early March. The equity is now trading in a key area marked by the USD 74.7 support line and a lower bound of the bullish channel. This technical pattern would push prices upside forming this way a solid rebound. This upturn could lead the security close to the USD 82.9 resistance. Moreover, the 50-week moving average is currently holding Home Depot and should corroborate the bullish trend.

Investors could take a long position considering a bounce in prices for targeting USD 82.9 in the short term. The stop loss could be placed below the support line at USD 73.4.