Will HD follow WMT's lead? Short HD.WMT and HD are important parts of the S&P and the S&P 'delta long' trade of the past several years is becoming unglued.
The gap down in WMT was significant. See HD's mid-day 'evening star'.
HD trade ideas
HD doesn't look doneI see room to run to 210 before significant resistance. No reason to fight this trend at all.
Home Depot (HD)Seems overbought. Waiting for it to retrace back to support (181.00). Then watching to see if it falls below or moves sideways or bounces. Also, expecting it to come back to the 200 moving average and bounce at which point I would consider entering. At this point, I will make a buying decision.
I think HD is going to break out today or tomorrowTrendlines converged yesterday. Seems to indicate a move soon. Expect move upwards if support @ 183.23 is broken. I think it's worth between 186 and 189 today based on discounted earnings model. Model not well tested yet, needs a couple more quarters.
THE WEEK AHEAD: HD, CSCO, TGT, BBY, WMT, GPS, AMAT EARNINGSWe have bevvy of retail earnings announcements next week as the full season tapers off:
HD announces earnings on Tuesday before market open with a background implied volatility of 23% (top quarter of 52-week range).
CSCO -- Wednesday before market open with a background of 27 (near 52-week high).
TGT -- Wednesday before market open, at 36 (top quarter of 52-week range).
BBY -- Thursday, before market open, at 53 (near 52-week high).
WMT -- Thursday, before market open, at 25 (near 52-week high).
GPS -- Thursday, after market close, at 44 (above middle, but below top quarter of 52-week range).
AMAT -- Thursday, after market close, at 41 (near 52-week high).
I generally prefer playing earnings where the background volatility exceeds 50%, and it's in the top-quarter of its 52-week range, implying that the best candidate for an earnings contraction play would be BBY with AMAT close behind/worth watching for an increase in implied volatility running into the announcement.
Broad-market exchange-traded fund-wise, there isn't much to play: the Brazilian exchange-traded fund continues to print implied volatility percentages at or above 30% (currently, 35-ish), followed by the petro exchange-traded fund, XOP (34).
For non-earnings individuals, TEVA (72/upper end of its 52-week range) continues to garner my attention, along with CTL (56), which -- post-earnings -- maintains high volatility.
The majors -- well, there isn't much to look at. IWM leads with a background implied of 16, which is basically tied with the QQQ's at 16. SPY comes in at a paltry 13 ... .
On the volatility product front, the first /VX future trading at or above 16 is out in May (184 DTE), meaning that a <90 DTE VIX Term Structure trade isn't in the offing for me. However, the VXST/VIX ratio finished Friday's session somewhat elevated (.92), so it's worth keeping an eye out for any >1.00 pops in which to consider Contango Drift trades, particularly as we wind into a rollover with VIX spot trading at 11.29 relative to the Nov contract's 11.60 (2 DTE).
Home Depot earnings playHome Depot will be reporting Q4 earnings on Nov 14th. I will be buying the $165 call options with Nov 17th expiration to catch the move.
Looking for wave 5, while HD breaks out to new highsLooking for wave 5, while HD breaks out to new highs
Home Depot bear-ISHHHHHHHH....Watching for a pretty decent pull back in HD. First Short target @157.24. T2 @153.61
$HD Breakout - 4 Buy signals - Caution Advised -Chart says it all.
Normally this is a very profitable setup for me and I would take this trade in a heart beat. However the last 4 candles catch me attention and make me weary. I will not take a position on this. Instead I will follow this and see what I can learn. Volume price analysis can tell us alot going forward.
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Home Depot shortHarvey had hit the United States hard, causing serious damage. Now Irma stands almost on the doorstep and could put another one on it. But if Irma Florida should still miss, the damage should not be as high as currently expected in many places.
HD increased strongly and opened an up gap after another. But the momentum and dynamic have been weakening and a nice doji was build yesterday. Here you could think about a short trade. The stop loss can be set at the high of the doji candle, the take profit could be at 152, which creates a very good risk-reward-ratio.
Home Depot sells off despite positive earnings to test $150Despite beating the street, Home Depot shares are selling off this morning as traders book profits against the news. Falling from a lower high near $156, the shares are testing the $150 round number. A failure to hold that level would signal the start of a new downleg with next potential support at the 200-day average near $144.00.
