4 Trade Ideas for Home Depot: Bonus Idea

Here is your Bonus Idea with links to the full Top Ten:

Home Depot, $HD, fell back to retest the pre-pandemic high in March and then took off to the upside. It topped in May and then spent the next month pulling back, finding support in late June. It reversed and ran higher to just shy of the May top 2 weeks ago and then stalled. The price got knocked back following their earnings report last week, but it ended the week moving back higher.

The RSI is also reversing back to the upside while the MACD levels after pulling back, in positive territory. The Bollinger Bands® are opening but flat. There is resistance at 330 and 337.50 with a gap to fill to 341 above. Support lower comes at 326 and 321 then 317 and 310 before 299. Short interest is low at 1.1%. The stock pays a dividend with an annual yield of 2.00% and begins trading ex-dividend on September 1st. The company is expected to report earnings next on November 16th.

The September options chain shows large open interest from 330 down through 290 on the put side and much larger ad focused at 340 on the call side. The October chain has open interest spread from 320 to 290 on the put side and again bigger on the call side at 340 and 350. In the November chain the open interest builds from 325 to a peak at 290 on the put side. On the call side it is spread from 320 to 360.

Home Depot, Ticker: $HD

Trade Idea 1: Buy the stock on a move over 330 with a stop at 320.

Trade Idea 2: Buy the stock on a move over 330 and add a September 325/315 Put Spread ($3.05) while selling the October 345 Calls ($3.70).

Trade Idea 3: Buy the September/November 345 Call Calendar ($6.10) and sell the September 310 Put ($1.96).

Trade Idea 4: Buy the November 300/335/350 Call Spread Risk Reversal (10 cents).

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After reviewing over 1,000 charts, I have found some good setups for the week. These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday which with August monthly options expiration in the books, saw equity markets tackling their 4th monthly expiration week dip and ending the week moving back up.

Elsewhere look for Gold to continue to consolidate while Crude Oil pulls back. The US Dollar Index continues to move to the upside while US Treasuries also work in an uptrend. The Shanghai Composite looks to pullback in consolidation while Emerging Markets trend lower.

The Volatility Index looks to remain low making the path easier for equity markets to the upside. Their charts look mixed on the shorter timeframe with the SPY and QQQ driving back towards their alltime highs while the IWM holds at the bottom of a long consolidation range. The longer timeframe shows the SPY strong and trending higher with the QQQ in a short consolidation at the top and the IWM stuck in that long consolidation. Use this information as you prepare for the coming week and trad’em well.

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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