Strong Quarter, Forecast Pushes Home Depot Stock Higher

HD is still down more than 28% year-to-date, however

Digital Content Manager
May 17, 2022 at 10:14 AM
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The shares of Home Depot Inc (NYSE:HD) are enjoying tailwinds this morning after the blue-chip retailer hiked its full-year sales and profit forecasts, amid higher prices and strong demand. In addition, the home improvement company posted better-than-expected first-quarter profits and revenue, while comparable sales also beat Wall Street's estimates. At last check, HD was up 4.1% to trade at $308.10.

Today's pop has shares eyeing a move above the 30-day moving average, which has been pressuring the equity since early January. It has been a rough year for HD so far, with the stock now down 28.7% in 2022, and far off its Dec. 6, all-time high of $420.61. 

The options pits are firmly bearish towards Home Depot stock, indicating the security could surge higher still, should some of this pessimism start to unwind. Specifically, HD's 10-day put/call volume ratio of 1.03 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks higher than 97% of readings from the past year.

Options traders are swarming the equity in response to today's update. So far, 11,000 calls and 11,000 puts have already crossed the tape, which is seven times the intraday average. Most popular is the May 325 call, followed by the 310 call in the same monthly series.

These traders are in luck. According to its Schaeffer's Volatility Scorecard (SVS) tally of 80 out of 100, HD has consistently realized bigger returns than options traders have priced in over the last 12 months.


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