Home Depot Inc share price hits a new 52 week high

Home Depot Inc share price hits a new 52 week high

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Shares in Home Depot Inc (NYQ:HD) are currently trading close to a 52 week high, with the share price up by around 2.58% to 254.9 over the past week. On a one-month basis, the Home Depot Inc price has risen by 13.8%.

For investors holding the stock (or considering buying it), the question is: what now?

52 week highs are a popular market indicator. But research shows investors can be left wondering whether to sell the stock and take a profit or buy more and ride the uptrend. With this in mind, here’s a primer on what you should know about stocks hitting ‘new highs’...

What happens when a share hits a new high?

52 week highs are always good news. But surprisingly, the prices of high performing shares can be slow to move when they publish positive earnings news.

Research shows this happens because investors are cautious about bidding high performing shares any higher (even if they deserve it). Psychologists call this anchoring. As humans, we tend to take our time when it comes to changing our opinions in the face of new information - even when it's good news.

This emotional tug-of-war often ends with the ‘new high’ stock drifting higher in price over the coming weeks and months. The upward trend is called “post earnings announcement drift”. As the news sinks in, momentum takes over and the price moves higher.

A look at Home Depot Inc’s StockReport could offer more insight into what’s driving the momentum in its share price - and whether that might continue.


What does this mean for potential investors?

With Home Depot trading close to a 52 week high, it’s possible that investors in the market are uncertain about where the price will move next. It's important to remember that momentum on its own is no guarantee of future returns.

To get a better idea about whether this trend will continue, it's worth doing some investigation yourself. Indeed, we've identified some areas of concern with Home Depot that you can find out about here.


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Home Depot's StockRank™

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Home Depot's StockRank™

With a StockRank of 84, Home Depot is more attractive than 84% of the 9,637 stocks we cover in North America, according to our proprietary ranking system.

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