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

Financial performance of the company:
Index – DJIA, S&P 500; Beta – 0.91;
Capitalization – 165.39 В; Return on asset - 16.20%;
Income - 6.34 B; Average volume – 6.14 М;
P/E - 23.85; ATR – 2.62.

Analytical review:

  • The company ranks the fourth on capitalization in the sector of “Service” among the issuers traded in the American stock market;
  • Yesterday, the company issued report for Q1 of the fiscal year 2016. According to press-release, net sales rose by 9% from 20.89 billion USD to 22.76 billion USD. In the reporting period net profit of “Home Depot” increased by 19% up to 1.44 USD per share against the forecast of 1.33 USD per share;
  • At the press-conference company’s management said that volume of sales has grown due to the improvement in the quality of clients’ service and recovery of the US housing market. The growth in sales in the USA has exceeded 7%;
  • The company released revised forecast for the fiscal year 2016. It is expected that the volume of sales will increase by 6.3% against previous forecast of 5.1%-6%. Net profit will grow to 6.27 USD per share against the previous forecast of 6.12-6.18 USD per share;
  • The company has best record of return on assets and return on investments among the closest competitors in the market. Return on assets is 88% and return on investments is over 16.5%. Average values in the industry are 7.79% and 5.62% respectively.

Summary:

  • Despite pressure from the strong USD, the company demonstrated the rise in sales volume and in the net profit. Company’s last report has increased investors’ confidence to the company’s business.
  • Revised forecast for the current fiscal year, recovery of the housing market and improvements in the quality of service will contribute to the rise in company’s shares.
  • It is likely that in the near future company’s quotes will go up.

Trading tips for CFD of Home Depot Inc.

Key levels:
Support levels: 130.80 USD and 127.00 USD.
Resistance levels: 132.75 USD and 136.80 US.

Medium-term trading, H4
At the moment the issuer is traded in the demand zone of 130.80-132.75 USD. If the price maintains this zone and in case of the respective confirmation (such as pattern Price Action), we recommend to open long positions. Risk per trade is not more than 2% of the capital. Stop order can be placed slightly below the signal line. Take profit can be placed in parts at the levels of 136.70 USD, 138.50 USD and 141.00 USD with the use of trailing stop.

Medium-term trading, H4
Medium-term trading, H4

Short-term trading М15
Yesterday the issuer opened with the gap up, amid weakness of the market (ETF SPY fell by 0.93%). After breaking down and consolidation at the local resistance level of 132.30 USD, it is advisable to open long positions. Risk per trade is not more than 3% of the capital. Stop order can be placed slightly below the signal line. Take profit can be placed in parts at the levels of 133.15 USD, 134.15 USD and 134.80 USD with the use of trailing stop.

Short-term trading М15
Short-term trading М15




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