Home Depot (HD) Offering Possible 58.23% Return Over the Next 21 Calendar Days

Home Depot's most recent trend suggests a bullish bias. One trading opportunity on Home Depot is a Bull Put Spread using a strike $217.50 short put and a strike $212.50 long put offers a potential 58.23% return on risk over the next 21 calendar days. Maximum profit would be generated if the Bull Put Spread were to expire worthless, which would occur if the stock were above $217.50 by expiration. The full premium credit of $1.84 would be kept by the premium seller. The risk of $3.16 would be incurred if the stock dropped below the $212.50 long put strike price.

The 5-day moving average is moving up which suggests that the short-term momentum for Home Depot is bullish and the probability of a rise in share price is higher if the stock starts trending.

The 20-day moving average is moving up which suggests that the medium-term momentum for Home Depot is bullish.

The RSI indicator is at 62.41 level which suggests that the stock is neither overbought nor oversold at this time.

To learn how to execute such a strategy while accounting for risk and reward in the context of smart portfolio management, and see how to trade live with a successful professional trader, view more here

LATEST NEWS for Home Depot

Consumer Discretionary Inspires Investors
Wed, 28 Aug 2019 23:01:54 +0000
Millennials motivate investors to buy companies that provide experiences, while home improvement stores benefit from falling mortgage rates.

US Indexes Rebound to Close Higher Wednesday
Wed, 28 Aug 2019 21:39:41 +0000
Dow Jones up 1% Continue reading…

IBD Stock Of The Day D.R. Horton Is In A Buy Zone Along With These Top Housing Stocks
Wed, 28 Aug 2019 20:21:58 +0000
IBD Stock Of The Day: D.R. Horton stock is in the buy zone amid an upbeat outlook for housing. PulteGroup, Home Depot, TopBuild and Floor & Decor are also in or near buy zones.

Stock Indexes Leave Red, Enter Green; Retailers Target, Costco Lead Markets Higher
Wed, 28 Aug 2019 19:23:42 +0000
Major stock indexes turned from red to green Wednesday, despite concerns over troubled trade talks, higher oil prices and an inverted yield curve.

Home Depot Stock Might Be Getting Too Much Respect
Wed, 28 Aug 2019 19:03:55 +0000
To understand how much respect Home Depot (NYSE:HD) gets from the market, just look at the price of Home Depot stock. The stock gained last week; in fact, it touched an all-time high before a recent, modest pullback.Source: Helen89 / Shutterstock.com Those gains came after the company missed Wall Street revenue estimates and lowered its full-year same-store sales guidance.In this market, that combination for any stock — let alone one with macro and tariff concerns — would have sent investors fleeing for the exits. Instead, the HD stock price actually rose more than 4% after the earnings release.InvestorPlace – Stock Market News, Stock Advice & Trading TipsThere's a case that, at this point, Home Depot has earned the benefit of the doubt. It's a great American retailer, with a likely $110 billion in sales this year. Home Depot stock has been one of the best stocks in the entire market. Valuation concerns in the past — and I've raised them as recently as April — have proven to be short-sighted.That said, investors are giving Home Depot an awful lot of credit. In fact, they're treating HD stock like a defensive play, not a cyclical one. That seems risky in this environment, and suggests that maybe this time, the HD stock price finally has gone too far. Home Depot Stock Rises on a Guidance CutTo be sure, Home Depot's Q2 report wasn't a disaster by any means. Earnings beat consensus by 9 cents. Same-store sales still increased 3%, including a 3.1% print in the U.S. The consolidated 3% gain was just 0.2 points below analyst estimates. * 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond And the general take on the quarter seems to be, as one analyst put it, that it "was no worse than feared". Even with modest signs of a housing slowdown (particularly in new construction) and potential impacts from the U.S.-China trade war, Home Depot is still growing sales and keeping operating margins basically flat. The lower revenue outlook is coming in part from deflationary prices in lumber (although tariffs are a factor as well).That said, the HD stock price doesn't seem to incorporate "no worse than feared". A 20x+ multiple to updated fiscal 2020 (ending January) guidance doesn't sound that high. But this is a cyclical stock — one whose sales and profits will plunge in a recession.Even that aside, the lower guidance is a concern. In late 2017, Home Depot gave a three-year target for comp growth of 4.5-6% — it's missing that mark. Margins are nearing the low end of the company's target range. Earnings-per-share rose less than 4% year-over-year: pre-tax income actually declined.Investors are clearly betting on a stronger second half. But the issue here is that Home Depot can't drive that improvement all on its own. The Concerns About the HD Stock PriceAfter all, Home Depot needs help. It needs the economy to hold up. In many places elsewhere in the market, investors hardly seem confident on that front.Admittedly, the iShares U.S. Home Construction ETF (BATS:ITB), my pick for the Best ETF of 2019, has gained 33% so far this year. But those gains have come simply from regaining some of its lost ground.ITB is up only 5% over the past year and still sits ~13% below January 2018 highs. And it's not like Home Depot stock — a major component of that ETF — hasn't joined in on the 2019 fun. It has risen 27% despite better performance heading into this year.Meanwhile, other macro-sensitive stocks — think Caterpillar (NYSE:CAT) or automotive stocks — have struggled and/or seen big sell-offs amid tariff and trade war worries. Home Depot's U.S. focus gives it exposure to the still-strong U.S. economy, admittedly, but on the whole investors still see at least some kind of downturn coming in the next few years.That's one big risk. The other is competition. Lowe's (NYSE:LOW) is trying to execute a turnaround and it's having some success. Its stock soared after earnings. Its same-store sales have outpaced those of Home Depot for the last two quarters. Home Depot isn't losing its crown any time soon, to be sure, but a combination of a weaker market and lower market share — even if both impacts are modest — is not priced in at 20x+ FY20 EPS. A Cyclical Treated Like a DefensiveAnd yet the HD stock price keeps marching higher. What's interesting about the trading — particularly this year — is that Home Depot stock really hasn't been rattled much by outside forces. It posted some big declines in 2018, but the biggest dip so far this year came from late April through late May, when the stock dropped about 9%. * 7 Stocks to Buy Down 10% in the Past Week That's a surprise given the fact that the market as a whole has, at times, been seized by selling amid tariff concerns or an inverted yield curve. A cyclical play like HD stock theoretically should be vulnerable to those swings, but it simply hasn't had much in the way of downside.Instead, Home Depot stock has traded more like a defensive stock. Its chart looks much more like that of Microsoft (NASDAQ:MSFT) or a Procter & Gamble (NYSE:PG). Those stocks aren't immune to macro worries, but they're generally considered "safer" plays for investors worried about overall growth.It certainly seems like, particularly after last week's earnings, the market is treating Home Depot stock the same way. But that would be a mistake. If a recession hits, Home Depot sales will fall. And so will the HD stock price. Investors ignore outside worries — and guidance cuts — at their peril.As of this writing, Vince Martin did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Tech Industry Dividend Stocks for Growth and Income * 7 Stocks the Insiders Are Buying on Sale * 7 of the Worst Stocks on Wall Street The post Home Depot Stock Might Be Getting Too Much Respect appeared first on InvestorPlace.

Related Posts

 

MarketTamer is not an investment advisor and is not registered with the U.S. Securities and Exchange Commission or the Financial Industry Regulatory Authority. Further, owners, employees, agents or representatives of MarketTamer are not acting as investment advisors and might not be registered with the U.S. Securities and Exchange Commission or the Financial Industry Regulatory.


This company makes no representations or warranties concerning the products, practices or procedures of any company or entity mentioned or recommended in this email, and makes no representations or warranties concerning said company or entity’s compliance with applicable laws and regulations, including, but not limited to, regulations promulgated by the SEC or the CFTC. The sender of this email may receive a portion of the proceeds from the sale of any products or services offered by a company or entity mentioned or recommended in this email. The recipient of this email assumes responsibility for conducting its own due diligence on the aforementioned company or entity and assumes full responsibility, and releases the sender from liability, for any purchase or order made from any company or entity mentioned or recommended in this email.


The content on any of MarketTamer websites, products or communication is for educational purposes only. Nothing in its products, services, or communications shall be construed as a solicitation and/or recommendation to buy or sell a security. Trading stocks, options and other securities involves risk. The risk of loss in trading securities can be substantial. The risk involved with trading stocks, options and other securities is not suitable for all investors. Prior to buying or selling an option, an investor must evaluate his/her own personal financial situation and consider all relevant risk factors. See: Characteristics and Risks of Standardized Options. The www.MarketTamer.com educational training program and software services are provided to improve financial understanding.


The information presented in this site is not intended to be used as the sole basis of any investment decisions, nor should it be construed as advice designed to meet the investment needs of any particular investor. Nothing in our research constitutes legal, accounting or tax advice or individually tailored investment advice. Our research is prepared for general circulation and has been prepared without regard to the individual financial circumstances and objectives of persons who receive or obtain access to it. Our research is based on sources that we believe to be reliable. However, we do not make any representation or warranty, expressed or implied, as to the accuracy of our research, the completeness, or correctness or make any guarantee or other promise as to any results that may be obtained from using our research. To the maximum extent permitted by law, neither we, any of our affiliates, nor any other person, shall have any liability whatsoever to any person for any loss or expense, whether direct, indirect, consequential, incidental or otherwise, arising from or relating in any way to any use of or reliance on our research or the information contained therein. Some discussions contain forward looking statements which are based on current expectations and differences can be expected. All of our research, including the estimates, opinions and information contained therein, reflects our judgment as of the publication or other dissemination date of the research and is subject to change without notice. Further, we expressly disclaim any responsibility to update such research. Investing involves substantial risk. Past performance is not a guarantee of future results, and a loss of original capital may occur. No one receiving or accessing our research should make any investment decision without first consulting his or her own personal financial advisor and conducting his or her own research and due diligence, including carefully reviewing any applicable prospectuses, press releases, reports and other public filings of the issuer of any securities being considered. None of the information presented should be construed as an offer to sell or buy any particular security. As always, use your best judgment when investing.