Home Depot (HD) is another stock that relies heavily on home construction and improvement and would likely benefit from both new home building and existing home purchases which typically require immediate customization or improvements. The recent price action in Home Depot is shown below.
Home Depot has had an impressive rally since the beginning of 2013. HD has tacked on over 20 points on its share price representing a near 30% move higher year to date. However, exuberance on Tuesday after earnings were released saw a spike Wednesday morning which was promptly reversed intraday.
Based on the recent price action in both the homebuilders ETF (XHB) and Home Depot (HD) readers would tend to agree with Chairman Bernanke that housing was recovering and that the recent mortgage application decline was merely “transitory.”