Home Depot shares were on a terrific run, but the company's recent underperformance is becoming more pronounced.
The stock was on fire. It rallied hard following the U.S. election in 2016, and last year rose 41 percent for its best year since 2012.
However, the stock has been underperforming quite badly since the broad market topped out in late January.
Even though the broad indices have bounced strongly from the lows earlier this year, Home Depot has actually fallen below its February closing lows and still stands in correction territory, off 14 percent from its 52-week high.
We'd also note that since the beginning of March, Home Depot is down 2 percent while the ITB home construction exchange-traded fund has rallied 6 percent in the same time.
In other words, Home Depot is not only underperforming the broad stock market, but is suddenly underperforming the group with which it's typically highly correlated.
I don't want to overstate the significance of its recent underperformance — at least, not yet. Home Depot is still trading well above its 200-day moving average, well above its trend line from the 2016 election, so the recent action is not a disaster.
However, if its underperformance continues, it could certainly raise a yellow warning flag on this stock after an excellent run.