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Two Ways to Play: Home Depot Hammers Home Earnings

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Strengthen your portfolio in good times and bad.

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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

Economics

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.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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