It’s probably unfair to compare Home Depot—which is essentially a specialty (home-improvement) business—to the old-line department stores that have weighed so heavily on the retail sector, but HD’s continued stock performance and consistently solid financials are nothing to sneeze at.
Tuesday’s earnings release day turned out to be a wild ride for HD—the stock shot below the previous day’s low on the open, jumped to a higher daily high in the next five minutes, turned south AGAIN towards the day’s low, before staging another rally to close more than 1% higher at $168.06—besting the previous record close on October 26 by about 40 cents [wipes hand across brow].
If you throw in Wednesday’s price action to this pattern—say, a close at least 0.75% below the up day’s close—the results are more bullish, with the next two days closing higher 54% of the time.
Some big prints in HD options went across the tape both the day before earnings and after they were released on Tuesday, including more than 26,000 November $170 call options—a strike just a little more than 1% above Tuesday’s intraday high of $168.14.
HD has now established clear support and resistance levels for its recent price action. Resistance lies in the area of the current high, while support is apparent around the October 17 and November 2 lows—a chart level that also dates back to the September 13 high. As of yesterday, HD was still closer to resistance than support.
1Home Depot is retail's bright spot as it courts younger shoppers who prefer DIY. CNBC.com. 11/14/17.