Trading in The Home Depot, Inc. (NYSE:HD) is quiet on Wednesday. Trading over the next couple of days may dictate the next trend. The retailer is trading at an important price level. This is why it is the Stock of the Day.

When a stock is in a downtrend, the market has a lot of buyer remorse. This appears on charts.

When a stock rallies off support, people who bought shares at were happy that they did. But when the support breaks, some decide buying was actually a mistake.

Many also decide that, if and when they can, they will sell their shares at the same price they paid. As a result, when the stock rallies back to the old support level, they place sell orders.

If a large number of these orders exist, they create resistance. See below.

Home Depot Chart

In July, $320 was a support level.

At first, people who bought shares then were happy they did when they rallied. But when this support broke in September, they regretted it.

When Home Depot returned to $320 a few days after, they placed sell orders. These orders created resistance, and a downtrend followed.

Now, a similar move may occur at the $288 level.

It was support in May. This support broke last week. Now Home Depot has reversed, and it is close to $288.

If this level becomes resistance, it could set the stage for a move lower, like it did at the $320 level.

Stocks sell off of resistance when some of the sellers who created it become impatient and undercut each other. This can put the shares into a downtrend.

If Home Depot can’t get back above $288, the shares may head lower.

Image: Shutterstock