Home Depot Stock Plummets as Company Withholds 2021 Guidance

The company reported an earnings and revenue beat, however

Assistant Editor
Feb 23, 2021 at 10:34 AM
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The shares of Home Depot Inc (NYSE:HD) are down 5.8% at $263.42 this morning, despite the home improvement company reporting fourth-quarter earnings that were slightly higher than Wall Street's estimates. Revenue also came in above forecasts, and comparable store sales surged 24.5%. What's dragging down HD instead is the company's withholding of fiscal 2021 guidance, with the company's Chief Financial Officer Richard McPhail saying he is not sure how much longer the pandemic will last and how consumer spending will be influenced in turn. 

The $285 level has acted as a ceiling for Home Depot stock in recent months, and it's been a tumultuous run on the charts since the equity hit an all-time high of $292.95 on Aug. 27. The security is also poised to close below its 180-day moving average for the first time since last May, and over the last six months has shed 7.2%.

Meanwhile, there's a serious penchant for bullish bets. This is per HD's 50-day call/put volume ratio of 2.03 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands higher than 86% of readings from the past 12 months. 

Now is the ideal time to take advantage of Home Depot stock's next move with options. The security's Schaeffer's Volatility Index (SVI) of 27% sits in the extremely low 7th percentile of its annual range. In other words, the equity sports attractively priced premiums at the moment.

 

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