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Two Ways To Play: Home Depot Beats the Number


Strengthen your portfolio in good times and bad.


Home Depot Beats the Number

Home Depot (HD) is out with third-quarter earnings today. The largest US retailer of home improvement products said earnings came in at $0.41 a share, $0.05 better than consensus estimates of $0.36.

Revenues fell 8% year-over-year to $16.36 billion against expectations of $16.28 billion.

Same-store sales in the quarter also fell, dropping almost 7%. But for the fiscal year 2010, the company issued upside guidance with earnings expected to come in around $1.55 a share, which is above Wall Street expectations of $1.53 a share. However, it still expects sales to be down about 9% for the year.

From the Bull Pen: The lack of sales growth is a cause for concern for Home Depot. Instead, bulls can look to AutoZone (AZO). One strategy may be to start an initial position as the stock trades toward $140 (also the 20 DMA); a short-term sell stop can be set below that level.

From the Bear Cave: With yesterday being such a strong day for the equity markets, bears can look to one noticeable laggard, Research In Motion (RIMM). Resistance seems to have formed at $65, so those playing the downside can set a buy stop above that level.

A Quick Check around the World

Asian trading closed with the Nikkei -0.63%, India 0.11%, Hang Seng -0.13%, Shanghai 0.24%, and Taiwan -0.76%.

Across the pond, we see the FTSE -0.29%, CAC -0.27%, DAX -0.20%

As of 8:20 AM EST, S&P Futures are trading -2.75 to 1103.75. Nasdaq futures are -4.25 to 1799.25.

A Look at Commodities

Over in commodities, crude oil is -0.56 to 78.34 while gold is -8.700 to 1130.50 this morning. Silver is -0.24 to 1815.5 and copper -2.050 to 308.30.

The dollar Index is +0.5200 to 75.4400.

On the Radar


08:30 Core PPI 0.1% cons.
08:30 PPI 0.5% cons.
09:00 Net Long-term TIC Flows
09:15 Capacity Utilization 70.8% cons.
09:15 Industrial Production 0.3% cons.

Click here for the full trading radar.

Good luck today.

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No positions in stocks mentioned.

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