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Take home this hot stock: Technician

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Take home this hot stock: Technician

They say home is where the heart is, but in the eyes of one technician it's also where you can find big profits.

The S&P 500 Homebuilders ETF, the XHB, hit a new multiyear high this week after retail behemoth Home Depot reported better-than-expected sales and lifted guidance on Tuesday. Shares of the home improvement giant are now up 17 percent this year, and chart guru Rich Ross sees even more gains to come.

Read More Housing recovery drives Home Depot sales beat

"When I look at a chart of Home Depot I see there is still upside from here," Ross said Tuesday on CNBC's "Trading Nation." Home Depot stock hit an all-time high this week on the back of its earnings beat.

According to Ross' charts, there are two strong areas of support that could act as a catalyst for the next leg up for Home Depot. "The first thing I see on this chart is this beautiful rounded base of support that has formed in the past six months, which also coincides with the 100-day moving average," he said. "I think Home Depot could get up to $129." That's a 5 percent rally for the stock, which traded near $122.60 on Wednesday.

To get to his price target, Ross simply measured the height of the basing pattern, which is roughly $11, and added it to the neckline at $118. "With the stock trading around $122, we'd be buying the stock right here."

A move to $129 for Home Depot is roughly in line with Wall Street estimates. Of the 29 analysts who cover the stock, the average price target is $129.71 with an "overweight" rating.

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