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Two Ways to Play: Home Depot Hammers Home Earnings


Strengthen your portfolio in good times and bad.

Investors get a raise with Home Depot

Home Depot (HD) reported results for its fiscal fourth quarter. The largest US home improvement company said earnings came in at 24 cents a share, 7 cents better than Wall Street expectations. Revenues fell by 0.3% on an annual basis to $14.57 billion vs. estimates of $14.07 billion. But the company issued upside guidance for the fiscal 2011 year with earnings of $1.79 a share vs. $1.73 consensus.

Home Depot also raised its dividend for the fist time since 2006 by 5% to 23.625 cents a share. In the press release, the company stated, "It is our intent to increase our dividend every year. Our longer-term targeted dividend payout ratio is 40 percent." Shares are up by 1% in the premarket.

From the Bull Pen: Be careful of getting too overweight Home Depot with the stock hitting a new 52-week high. If you're looking for retail, Walgreen (WAG) may present a positive risk/reward opportunity. One strategy may be to fade (read: buy) the weakness into $33 support with a sell stop below that level.

From the Bear Cave: Careful of shorting a dull market. But the homebuilders ETF (XHB) might be tracing out a double top as the stock has rallied on weaker volume. A close above $16.30 would invalidate this bearish pattern.

For more ways to play and other trading ideas from more than 30 top market pros, take a free trial to our Buzz & Banter.

A Quick Check Around the World

Asian trading closed with the Nikkei -0.47%, India 0.30%, Hang Seng 1.21%, Shanghai -0.69%, and Taiwan 0.49%.

Across the pond, we see the FTSE -0.06%, CAC -0.53%, DAX -0.71%

As of 8:05 AM EST, S&P Futures are trading -2.25 to 1105.00. Nasdaq futures are -06.25 to 1814.75.

A Look at Commodities

Over in commodities, crude oil is -1.09 to 79.21 while gold is +00.60 to 1113.70 this morning. Silver is -0.032 to 16.185 and copper -0.0255 to 3.2815.

The dollar Index is +0.0650 to 80.6500.

On the Radar


09:00 Case-Shiller 20-city Index: -3.0% consensus
10:00 Consumer Confidence: 56.5 consensus

Click here for the full trading radar. Good luck today!
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No positions in stocks mentioned.

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