Home Depot Shares Stay Afloat Ahead of Earnings Release

Home Depot Shares Stay Afloat Ahead of Earnings Release

Home Depot Shares Stay Afloat Ahead of Earnings Release

Home Depot shares have been on an uptrend, as seen on the longer-term time frames of the stock price. Shares have recently bounced off the long-term exponential moving average on the daily time frame, indicating that buying pressure is present. However, stochastic is already closing in on the overbought zone, hinting that a selloff might happen.

The main event risk for HD stock price action is the release of Home Depot’s earnings report for the first quarter. Stock analysts are expecting to see $1.15 in earnings per share for the first few months of 2015, up from the previous $0.96 a year ago.

Home Depot Shares Outlook

Stronger than expected earnings data could lead to renewed buying momentum for Home Depot shares, possibly pushing prices up to the previous highs around $116/share eventually. On the other hand, bleak data could spark a selloff below the moving average support and onto the next area of interest at $104/share.

The short-term EMA is still above the long-term EMA on the daily chart, indicating that the climb could carry on. However, the moving averages are inching closer together, suggesting the possibility of a crossover and a potential reversal for Home Depot shares.

The FactSet consensus for total sales is $20.81 billion, up from $19.69 billion a year ago. Analysts at Estimize, which surveys sell-side analysts like FactSet, as well as hedge-fund executives, brokerages and buy-side analysts, project total sales of $20.86 billion.

The company is set to release its quarterly earnings report around today’s New York trading session, just before the stock market opens. Recall that the company posted stronger than expected earnings data in the previous quarter, supporting expectations of another strong figure for the start of 2015. However, cold weather conditions may have weighed on consumer spending and probably put a downside drag con company revenues.

To contact the reporter of the story: Jonathan Millet at john@forexminute.com

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Samuel Rae is an active retail trader across a variety of assets, including currencies, stocks and commodities and the author of Diary of a Currency Trader (Harriman House). His personal strategy focuses primarily on classical technical charting patterns with a fundamentally supportive bias, combined with a strict, risk management-driven approach to entries and exits. He is an Economics graduate from Manchester University, UK.