4 Trade Ideas for Home Depot: Bonus Idea

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

Home Depot, $HD, comes into the week rising above short term resistance after consolidating over the 200 day SMA. This is just above the middle of a range that price has oscillated in since February 2022. The Bollinger Bands® are open to the upside. The RSI is rising in the bullish zone with the MACD positive and moving higher. There is resistance at 311 and 314.25 then 322 and 324.50 before 330 and 334 then the top of the range from 340 to 350. Support lower comes at 309 and 305 then 300. Short interest is low under 1%. The stock pays a dividend with an annual yield of 2.69% and starts trading ex-dividend November 29th.

The company is expected to report earnings next on February 20, 2024. The December options chain shows big open interest from 310 to 280 on the put side and building from 290 to a peak at 310 then tailing to 340 on the call side. The January chain is biggest at the 300 put and spread from 290 to 360 on the call side. February shows biggest open interest at the 275 and then 310 put strikes, and at the 325 and 330 call strikes. Finally, the March chain is biggest at 310 and 300 on the put side and at 310 on the call side.

Home Depot, Ticker: $HD

Trade Idea 1: Buy the stock on a move over 312 with a stop at 305.

Trade Idea 2: Buy the stock on a move over 312 and add a January 310/300 Put Spread ($3.60) while selling the March 340 Call ($3.00).

Trade Idea 3: Buy the January/February 330 Call Calendar ($1.90) while selling the January 285 Put ($1.85).

Trade Idea 4: Buy the March 280/320/330 Call Spread Risk Reversal (30 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 heading into the last week of November, saw equity markets continue to look strong and ready for more upside.

Elsewhere look for Gold to continue its short term move higher while Crude Oil bounces in the downtrend. The US Dollar Index continues the short term drift to the downside while US Treasuries bounce in their downtrend. The Shanghai Composite looks to stall in its bounce while Emerging Markets consolidate in a broad range.

The Volatility Index looks to remain very low making the path easier for equity markets to the upside. The charts of the large cap and tech indexes look strong, especially on the longer timeframe. On the shorter timeframe the QQQ has cleared a major hurdle, and the SPY could be next as it is not far behind. The IWM continues to remain stuck in consolidation but positive in the short run. Use this information as you prepare for the coming week and trad’em well.

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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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