2016-08-17 16:47:28

The Home Depot Inc., #HD [NYSE]
Services, Retail, USA

Financial performance:

Index – DJIA, S&P 500; Beta – 0.91;
Capitalization - 165.39 В; Assets profitability - 16.20%;
Revenue - 6.34 B; Average volume – 6.14 М;
P/E -23.85; ATR – 2.62.

Analytical review

  • The Company has the 4th biggest capitalization in the service sector among the issuers listed on the US stock market.
  • The company's shares have grown by over 3.5% in the past three months. Yesterday the retailer published a positive corporate report for the second quarter of the fiscal year 2016 that could drive HD’s quotes to rise further.
  • According to the press release, the company's revenue grew 6.6% to 26.472 billion USD, exceeding market expectations of 26.437 billion USD. The Home Depot announced that net profit had grown 13.9% to $1.97 per share. Analysts expected a value of $1.96 per share.
  • At the press conference the corporation's management announced that the company's results had been impoved and exceeded market expectations amid US housing market growth. The sale volumes in the US increased 5.4%.
  • The retailer announced an updated forecast for the current fiscal year. The company's management expects profits to grow 6.3%. The Home Depot forecasts profits at $6.31 per share against last year's value of $6.27 per share; At the beginning of August, investment bank Stifel upgraded the ranking of The Home Depot and updated the target cost of the company's stock to 157 USD.

Summary:

  • The latest report has consolidated investors' confidence in the company. The retailer's revenue and net profit grew, exceeding market expectations. The updated forecast will contribute to growth of the company's shares. Large investment companies forecast a positive trend for the company.
  • Thus, we expect that the company's quotes will be rising in the nearest future.

Trading tips for The Home Depot Inc.'s CFDs

Key levels:
Support levels: 135.65 USD, 133.25 USD
Resistance levels: 137.40 USD, 138.85 USD

Medium-term trading, H1
The issuer is currently trading near a support level of 135.65 USD. Once this level steadies and relevant confirming signals appear (Price Action patterns, for example), we recommend searching for market entry points to open long positions. Risk per trade: no more than 2% of equity. Stop order shall be placed a bit below the signal line. We recommend that prospective profits should be fixed partly at the levels of 138.80 USD, 140.50 USD and 143.00 USD, with Trailing Stop applied.

Medium-term trading, H1
Medium-term trading, H1


Short-term trading, M15
The issuer is currently trading between the local support and resistance levels of 136.10/137.00 USD. We advise you to search for market entry points once these levels are broken and tested. Positions shall be opened in the direction of the signal line and the nearest support/resistance level. Risk per trade: no more than 3% of equity. Stop order shall be placed a bit above/below the signal line. Prospective profits shall be fixed partly, at 50%, 30%, and 20% of a prospective fluctuation, with Trailing Stop applied.

Short-term trading, M15
Short-term trading, M15