Home Depot (HD) Offering Possible 29.87% Return Over the Next 22 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 $282.50 short put and a strike $277.50 long put offers a potential 29.87% return on risk over the next 22 calendar days. Maximum profit would be generated if the Bull Put Spread were to expire worthless, which would occur if the stock were above $282.50 by expiration. The full premium credit of $1.15 would be kept by the premium seller. The risk of $3.85 would be incurred if the stock dropped below the $277.50 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 75.05 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

The Home Depot Mobilizes to Support Communities Facing Hurricane Laura
Tue, 25 Aug 2020 21:00:00 +0000
As Hurricane Laura marches toward the Gulf Coast, The Home Depot® will activate its Hurricane Command Center to support communities preparing for the storm.

COVID-19-related consumer needs are turning Best Buy into an essential retailer, analysts say
Tue, 25 Aug 2020 18:45:00 +0000
Best Buy’s latest earnings beat expectations with shoppers heading to the consumer electronics retailer for appliances, computers and more during the coronavirus pandemic.

Why Best Buy’s Pandemic Bounce Fell Short of Target’s
Tue, 25 Aug 2020 13:43:38 +0000
(Bloomberg Opinion) — Best Buy Co.’s second-quarter sales increase was not quite as booming as those of its big-box store peers. But the consumer electronics giant still belongs in the pandemic-era retail winner’s circle because its growth was, in some ways, harder fought. The retailer reported Tuesday that U.S. comparable sales rose 5% from a year earlier, a far cry from the greater-than-20% growth reported last week by Target Corp., Home Depot Inc. and Lowe’s Cos. As destinations for groceries and prescription medicines, the likes of Walmart Inc. and Target Corp. kept their doors open throughout the crisis. So, too, did the home-improvement heavyweights. Best Buy, however, moved to close brick-and-mortar stores in the early days of the pandemic, initially using them only for curbside pickup of online orders.   By the time the second quarter started, it had opened only a portion of stores, and customers had to make appointments. It gradually ramped up from there, with almost all stores open for shopping without appointments by late June. That means that for roughly six weeks of the quarter, it was relying solely on e-commerce and appointments to meet customer demand. While its digital sales soared, rising 242% from a year earlier, it makes sense that having brick-and-mortar shopping so restricted for a while kept a lid on total sales. For expensive items such as home theaters, many people are going to want to see options in-person before they buy. The company reported that in the final weeks of the second quarter, when stores had fully reopened, its sales were up 16% from a year earlier. Additionally, sales rose 20% in the first three weeks of the current quarter, though executives don’t expect growth to continue at such a blistering pace for the entire period. That detail about the slowing sales growth sent Best Buy shares down in pre-market trading from their record close on Monday. Best Buy, of course, benefited from fresh consumer needs and wants borne of stay-at-home lifestyles. As customers needed to build out work-from-home setups or remote learning stations for their children, it reported big sales of computers and tablets. The largest comparable sales growth came from its appliances category. This is a different pattern from the one in the first quarter, when a burst of video game purchases helped offset weakness in other lines of business. While the company said it experienced constrained inventory in certain categories, overall, it reflects well on Best Buy’s supply chain and inventory management strategies that it held up as demand shifted to different areas. Best Buy executives should certainly view its results with some measure of caution. Some of the sales rung up in the quarter could be attributed to demand that was just pulled forward. In other words, people who would have otherwise hung on to an old laptop until next year might have pulled the trigger on a new one this summer to work more efficiently from home. They should take comfort, though, in the fact that plenty of the increased demand is incremental business. If not for widespread work-from-home orders, people would never have bought some of the desktop computers, printers and scanners that flew off shelves this summer. If not for a dearth of events to keep them busy, they might not have sprung for a projector to watch movies. If not for extensive restaurant closings that are forcing more home cooking, they might not have purchased an extra freezer for the basement. Given that the unemployment rate is still soaring and Congress is deadlocked on additional relief for workers, it’s worth pondering how Best Buy would hold up if the economy remains weak. Matthew McClintock, an analyst with Raymond James, pointed out in a recent research note that the retailer’s assortment is much more resilient in a recession than it was in 2008 and 2009. Since then, the chain has made a big push into appliances, capturing market share that once-mighty Sears squandered. Replacing a broken dishwasher or refrigerator is not exactly a discretionary purchase, so being a bigger player in that category provides some measure of insulation for Best Buy. Plus, the categories it is better known for, such as computers, tablets and smartphones, feel less like discretionary purchases than they once did. Those items are essential for remote work and are communications lifelines when people are stuck at home.   All of that leaves Best Buy relatively well-positioned to ride out what is sure to be a choppy end of the year for the wider retail industry.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Sarah Halzack is a Bloomberg Opinion columnist covering the consumer and retail industries. She was previously a national retail reporter for the Washington Post.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

3 Ways Lowe's Topped Home Depot This Quarter
Mon, 24 Aug 2020 15:31:21 +0000
Both Home Depot (NYSE: HD) and Lowe's (NYSE: LOW) announced more than 20% sales growth along with soaring profits as consumers redirected spending from categories like eating out and vacationing toward their homes. Let's look at that metric and two others that suggest Home Depot has some work to do to close the performance gap between the two businesses. Since he took over the CEO spot in mid-2018, Marvin Ellison, who used to be an executive at Home Depot, has been telling investors that Lowe's can compete at the top of the home improvement industry.

Retail Stock Darlings Are on Borrowed Time
Mon, 24 Aug 2020 13:00:10 +0000
(Bloomberg Opinion) — The latest earnings season showed retailers of all stripes, not just e-commerce companies, have been winners in the pandemic. Amazon.com Inc. is reaping a windfall, as are emerging e-commerce stars such as Wayfair Inc. and Etsy Inc. But physical giants such as Home Depot Inc. and Target Corp. and athleisure apparel company Lululemon Athletica Inc. have reported stellar earnings too. This is partly because fiscal relief passed by Congress has supported household incomes despite the rise in unemployment. But it’s also because, as Target's CEO noted, consumer spending that would have gone to in-person activities such as travel or dining has gone into buying physical products instead. The risk to these companies — and to investors who have sought refuge from the pandemic in their shares — is what happens once there's a vaccine and consumer spending shifts back to in-person activities. That normalization process will be good news for the economy overall but bad news for retailers that have benefited from this year's disruption.So many retailers have thrived in the pandemic that we can think of them holistically in a behavioral sense, rather than just dividing them into traditional themes such as e-commerce or home improvement. Recreation vehicle sales are up as would-be travelers see them as safer than airplanes and hotels. Swimming pool makers have benefited as people try to relax at home. Yoga clothes and athleisure are in, while business suits are out, as work-from-home employees prioritize comfort over office attire. For the most part, if you sell goods that still have utility while in-person gatherings are curtailed, if consumers believe it's safe to shop with you, and if you've had inventory to sell, then you're doing well. This won’t last forever. There may be some permanent shifts here; in the case of e-commerce, perhaps customers who previously wouldn't have shopped online in a certain category may continue to shop that way going forward. But a lot of this shopping will prove temporary once life gets back to normal. Consumers have fixed budgets, and a dollar spent on travel or dining is a dollar that can't be spent buying stuff online. And once you buy one RV or swimming pool you usually don't need another one.Another factor beyond wallet share is time share. When it comes to social media or streaming services, it’s understood that a minute spent on Facebook is a minute not spent watching television or Netflix. There are only so many minutes in the day, and people have to sleep, work, eat, and live their lives. The same applies to shopping. The pandemic has changed how we use our time. We can’t spend weekends with friends or family, or at restaurants or weddings, as much as usual. So it’s somewhat more appealing to go to a big-box store to get out of the house, or to spend more time shopping online, if only as a diversion. A Saturday morning not spent at brunch is a Saturday morning that can be spent shopping for outdoor furniture. That process will reverse after a vaccine.There’s a limit to how much things can move in the opposite direction; most people won't eat twice as many steak dinners in 2021 to make up for lost time in 2020. But it's possible that, once it's safe to do so, people will spend much more time on in-person activities than usual for a while. People may revel in doing things they previously took for granted. With two young kids, I'm already dreading the possibility of visiting a Disney theme park next year, knowing how many other families who didn't get their Disney pilgrimage this year will be fighting for the same reservations I will. Difficulties finding in-stock items or reserving a home contractor right now might be replaced by struggles to book restaurants and hotels a year from now.This could be a rude awakening for investors in retail stocks that have provided a measure of security in 2020. It's possible, perhaps even likely, that the two-year performance of these companies in 2020 and 2021 will exceed what anyone could have reasonably expected at the end of 2019. But from the standpoint of trends internalized by investors this year, performance next year could disappoint — particularly relative to companies involved in activities that have been suppressed in 2020 but could come back strong in 2021.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Conor Sen is a Bloomberg Opinion columnist. He has been a contributor to the Atlantic and Business Insider.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

Related Posts