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Home Depot and Lowe's Trade Lower/ Trading Service Update

Thursday, May 28th, 2009

9:00pm (EST)

Home Depot (HD, $22.70, down $0.63) and Lowe’s (LOW, $19.02, down $0.61) lost 3% after a report showed first quarter mortgage delinquencies jumped to 12%. That means more than one in 10 people are behind on their house payments.

Not only that, home owners with good credit are starting to feel the pinch. In fact, they now make up the largest share of foreclosures as job losses and pay cuts continue to cut like a knife.

All of this could mean more foreclosures and add to the already growing housing inventory which in turn depresses building activity. I had mentioned the sector a couple of weeks ago and said now was not the time to go chasing.

That would include Lowe’s and Home Depot. I would love to see Lowe’s fall back to $17 which is support and if it falls below that level it could test its March low of $13. Home Depot could get interesting at $20. They got a pop on good earnings but nobody is buying the higher priced items. We will have to see how they trade and it’s possible they may not even get to our “alert” prices. If they do, we can then decide if we should go long or short.

Which brings me to another point. I wanted to give everybody some more details on our new OptionsMentoring.com trading service. It is going to be a monthly service that allows you full access to our exclusive menbers area. Here you will find archived training sessions that you can view anytime at your leisure. Plus, we will be offering live training classes three days a week. You will also have unlimited email and phone support as well as our trade picks.

Folks, this is an incredible deal because you will learn so much about options that will make you a better trader. And if you are brand new to options trading, this program is a must! You will learn credit spreads, directional trading, chart reading and much more. The response we have received has been great and I encourage those of you who haven’t emailed me to do so. I want those of you who follow me to be the first to get in.

Rick Rouse
Rick@OptionsMentoring.com

Tags: blog options, Home Depot, Lowe's, option trading service, options blog
Posted in Company Commentary, Earnings, Market Analysis, Option Trades, Watch Lists | No Comments »

Market Looking For Answers

Friday, January 23rd, 2009

The market is trading lower this morning and the Vegas over/under is 8000 for the Dow. I got 50 cents on the under. The index slid nearly 200 points at the open but has cut that in half trade which puts us at 8009. There are a few bright spots in the market but the overall mood is that the bears won this week and the bulls are going home for the weekend to regroup.

The bank stocks are killing any momentum the bulls gather as Capital One Financial (COF, $19.06, down $2.87) joins the latest list to report lousy earnings. The company had to write-off another billion for bad loans and posted a worse-than-expected loss for the quarter. Looks like the default rate for people who can’t pay their credit cards is rising…not a good sign. And just how inflated were the put options for COF you ask? The February 20 puts (COFND, $2.85, up $0.20) are only up 7% on the news while the stock is down 11%.

In other words, the price for the COF put options were so inflated and it was almost a given that the options would quickly be in-the-money when COF reported earnings. I’ll give you a perfect example of how this works and why anyone who bought these options overpaid.

Home Depot (HD, $21.85, down $0.12) is currently trading where COF closed at yesterday. The Home Depot February 20 puts (HDND, $0.71, up $0.02) are trading at 70 cents and if Home Depot were to suddenly fall 10%, these options would double. We teach you how to look for these type of things in our training course and videos…

Geron (GERN, $8.03, up $2.82) is getting a huge pop today and is up 50% on news that they got the go ahead to start human trials using stem cells intended to treat severe spinal cord injuries. The February 7.50 calls (GQDBU, $1.40, up $1.30) is up a whopping 1300% on the news. Don’t get caught in the hype, it will be years before anything material comes from this.

Intuitive Surgical (ISRG, $94.61, down $1.40) traded as low as $87 this morning and has made a nice recovery. The February 90 puts (AXQNR, $3.80, down $1.30) hit a high of $7.20 but have been hammered on the stock’s quick rebound. This shows just how much you have to manage your positions in this market. We were out at $6.50 and while you could have squeezed the trade for a few more points at the open, it just wasn’t worth it as you can see.

And as fate would have it…The gold trades were good to us for two days but the honeymoon is today. I planned a “three-day” marriage which turned into 2 days and we got some nice returns. However, Barrick Gold (ABX, $39.03, up $3.45) and Goldcorp (GG, $28.95, up $2.32) are having monster days.

The Goldcorp February 32.50 calls (GGBZ, $1.10, up $0.50) were profiled at 40 cents and the Barrick Gold February 40 calls (ABXBH, $2.65, up $1.40) could have been picked up for 90 cents as both are up nearly 200% from those entry prices. If you ignored my bonehead advice (sly grin) and held on for another day, you made another 100%. When I blogged “Gold Back On Radar” Wednesday morning, I knew something good was going to happen with gold this week.

Here were my thoughts:

“Over the last couple of years, gold has had a pretty good run from late January until the end of February. In November 2008, gold had dipped to around $750 an ounce and we jumped on the train for the way back up. We set stops and were out in less than a week.

Look, I’m not sure if gold is ready to challenge $900 but the move in gold is hard to ignore with many of the banks and the currency markets still unsettled. I don’t trust Newmont but Goldcorp and Barrick Gold are a possibility.” –

Man, I love it when history repeats itself. Gold is up $43 to $903/ oz. and looks to be knocking on $900′s door. If you haven’t gotten off the bus, Gus, close the trades though. Or at least half the trade. It would be hard not to take 200% off the table with the weekend coming up.

Anyway, I’ll be back this weekend with the Weekly Wrap and a few thoughts on Genentech (DNA, $83.10, up $1.40).

If you want to be added to the mailing list for the Weekly Wrap or are interested in really learning how to trade options, shoot me an email.

Rick Rouse
Rick@OptionsMentoring.com

Tags: Barrick Gold, Capital One Financial, Genentech, Geron, Goldcorp, Home Depot, Intuitive Surgical
Posted in Financial Stocks, Gold, Hot Stocks, Market Analysis, Option Trades, Strategies | No Comments »

Home Depot Option Calls up 50%

Thursday, September 4th, 2008

Home Depot (HD, $29.33, up $1.26) had another big day Wednesday, rising 4.5% ahead of the August same-stores sales figures due out today. There are different opinions on what Home Depot’s numbers will be or how the market will react so let’s go over a few “educated guesses” in our head and how they may have an affect on our current trade.

Home Depot is dropping hints that home-owners are fixing up their homes more which could lead to a surprise number above Wall Street’s expectations. With home sales still falling harder than a drunken sailor, people seem to be “sprucing” up their homes not necessarily to sell them whenever home prices go up but to stay in them. I still think we haven’t seen the bottom for housing and so it could be another couple of years before we see a noted pickup. Why not make your house more comfortable if you’re gonna be there a while?

The flip side of this coin is that home-owners are buying the cheaper items instead of the big-ticket items. If so, Home Depot could report a number Wall Street doesn’t like which could send the stock lower. How much lower will be key.

The only other possibility of where this trade could be headed is where the stock stands on a technical level. A quick look at the chart shows a strong resistance at $30 which could mean one of two things. Either we break through $30 and our calls go higher OR the stock hits resistance and heads back down.

The January 2010 25 calls (WHDAE, $7.35, up $0.65) were mentioned at $5 on August 19. At the time, the reason we were going long the 2010 January call options is because we were trying to get in as Wall Street kept punishing the stock. But we needed to give ourselves plenty of time for Wall Street to notice just how beaten down this stock really was before the action started coming back in.

If you’ll recall, back in May, Home Depot reported a whopping 67% drop in profits and I wrote about the mood of the market back then and we knew earnings estimates were going to be lowered. In August, just three months later, Home Depot beat Wall Street’s estimates but the stock closed lower for the day. This time around Home Depot reported a 24% drop in profits. The market always takes a stock to an extreme high or an extreme low based on valuations by analysts. By looking at just these two numbers, the smart investors saw an “improvement” in the quarter to quarter numbers and started buying Home Depot again. And here we are knock, knock, knocking on $30′s door.

I know I went deep on the analysis this morning but the simple fact is this is another easy one to figure out. Many of you have a 50% profit. If you sell now, then you don’t have to worry where the stock goes. If the stock goes higher, you miss some more profits, if the stock trades lower, then you saved some profits. As Steve Miller would say, “go on take the money and run”.

Rick Rouse
Rick@OptionsMentoring.com

Tags: August same-store sales, Home Depot
Posted in Company Commentary, Hot Stocks | No Comments »

Tax-Refund Plays

Monday, April 28th, 2008

Refund checks hit consumers bank accounts today and here a few stocks that could trade higher over the next few weeks. Of course, there’s no guarantee that these stocks will trade higher but if consumers do decide to spend their rebates here’s where they may go:

Best Buy (BBY, $45.32, up $0.23)
Home Depot (HD, $29.78, unchanged)
Kohl’s (KSS, $50.09, down $0.56)
Kroger (KR, $26.40, unchanged)
Sears Holdings (SHLD, $100.46, up $0.71)
Wal-Mart (WMT, $57.72, up $0.07)
Wendy’s (WEN, $28.96, up $0.65)

Kroger and Sears are offering discounts and other incentives for people who turn rebates into gift cards. Home Depot is running advertising campaigns that suggest ways for you to spend your money and Kroger expects many people could “stock up” with food prices continuing to climb.

The rebates went out a week earlier then planned and there’s no doubt people are looking forward to the rebate to help with rising gas and food costs. Some may pay down credit cards but more than likely most people are planning to spend a good portion of their refund.

Rick Rouse
Rick@OptionsMentoring.com

Tags: Home Depot, Kroger, Wendy's
Posted in Hot Stocks | No Comments »

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Rick, I appreciate the advice. I think I will just sit back and utilize your selections only for awhile. This will obviously save me a great deal of money in commissions. I have gone thru your entire site including the video on money management. This has brought me to the stark realization that I have been trading too much for too little. I definitely have not been "swinging for the fences", but I also think I have been getting impatient with trades and getting out too fast. This has no doubt caused me too trade too much. I like, and definitely agree on, the advice on money management. Thanks for the help.

SCOTT H.
Thank you!!! I held on to the NFLX position since Nov. 13 at a cost of $1.89. Sold ½ on April 14th for a 540% return and the other ½ upon earnings for 702% return. Total profit of $11,615 a 621% return. Keep the recommendations coming and thanks to you and your team for the service you provide.

PETER G.
Rick & Team, GREAT Call on NKE for my two trading accounts:
1) Entry at .65, out at 1.45, 1.55 Profit = $415
2) Entry at .60, out at 1.75, 1.50 Profit = $485

LAWRENCE O.
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3) Took profit on your Imax March 12.5. 20 cent trailing stop at 1.90 yesterday. Not sure what the profit on that was, but profit is profit.

I see that you took a loss on some of these. It’s all good. I look to trade your “ideas” not your exact calls. I THANK YOU! For your ideas and commentary. Keep up the good work. And keep those ideas coming.

C.J.
Loving this subscription so far! I got into the BRK feb 76 calls the day you talked about right before the split...now up over 300% (0.70 to 2.475)! Keep the good picks coming and let's see some OSIS and EMC upside soon! Just wanted to share my positive enthusiasm on your newsletter...it gives us individual investors great ideas on not only the options market, but also the broader equity market! Case in point is BRK...I can't always read the breaking business news but its easy to read your twice daily updates on my smartphone...helped me get some BRK shares immediately after the split which I will hold for the long haul! Thanks again!

SHAUN
Aloha Rick - Thank you so much for the great CL pick. I am not sure if there was buy-out/merger news or what but at 3PM today Colgate-Palmolive absolutely EXPLODED to the upside, and my calls turned into green candy when they went from 1.40 to 3.8 in a matter of seconds! I even sold a few for over 4.0! Much thanks and keep the solid picks up my friend, honestly. Only a fool would scoff at 267% gains... Peace!

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Hi Rick, as a new member all I can say is, 'show off' LOL, with PCLN.

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Hi, good morning. I jumped the gun a little on this one (PCLN). But still made $1,675.00 profit!! Very happy!! Keep up the good work!! Thanks.

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Rick - I wanted to say thanks for getting me started on the right foot with your service. I have made six trades since starting on October 22, 2009. Five are winners and One loser netting me $6,245. Thanks again and keep the trade recommendations coming.

NOEL
I got into the Nike 60 Call at 1.85, sold at 5.00, also bought a 55 put at 1.05, but got stopped out at .35. What a ride! $2830.00 in the black even with the put. It's right at 100% return. I hope earnings season coming up is going to look like this trade.

TODD F.
Nice call on Nike. I think I'll go buy a pair with my profits! : ) I did the straddle for safety but still made 62% on the trade. Not bad for less than 24 hours. If Goldman is right, then the Nov 70s or 75's could be a steal today.

PAUL H.
What a sweet way to get introduced to Momentum. My first trade based on your picks and it a 2X. Thank you!

NOEL
“Limit order was set at 1.60 on RIMM so it sold. I may have left some money on the table but you can't go broke making a profit. That was a fun trade. Thank you. Good call. I’ve been watching and trading Rick's advice since March. It’s usually a fun ride, but I give him heck when it's wrong to. :) ”

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“I made $420.00 on ANF in 2 days. Thanks for the trade and updates on getting out of the trade.”

CHARLES M.
“I did follow a lot of your trades with 1-2 contracts per trade and YTD I’m up 108%. I try not to follow blindly by not entering all of your trades and sometimes entering the ones you don’t. I entered AIG a few weeks ago against recommendation – that one hurt.”

BRYAN C.
“I have been following you for several months and am interested in the new service. I hate to see the free service go away but as they say, “all good things must come to an end”. My ability to join will be greatly influenced by the monthly fee so I’m very curious to see the new prices. Thanks for making April a great month for me and my family.”

JOHN H.
“I have really enjoyed the past month since finding your blog. You have made some great calls. I would appreciate info. on the new options mentoring program. Thanks.”

JEFFREY
“Hi Rick, I have been following your blog for several months now and I would like to be including on the list for your new service and to receive more information about it. And yes I was a Dendreon winner with your tips. Turned $280 into $7700, and literally saved my butt.”

ED
“I made over 6k on your Dendreon trade, and I’m very interested in learning how you pick and trade options. Sign me up.”

GREG
“Rick – Wow what a day! I got in at the Dendreon calls at $2.25. Thanks to for your advice. I appreciate that. This company has a lock on this type of therapy and no one else in the world is close. Kind of reminds me of the type of companies that Peter Lynch and Warren Buffet suggest that investments be made in. Companies that can build a moat around their business model, that allows them to charge a premium for their product or service. In other words - a monopoly.”

KEN
“Hi Rick, Thank you so much for the Dendreon trade, I made almost $10,000 with that trade with a little over $2,000 investment. You have shown me the power of options trading. Again, thank you so much for all your inputs.”

GARETT
“Hi Rick, thanks for the encouragement to play the dendreon calls! did freaking great! Got in the first lot at $1.44 on 3-24-09, sold at $2.45, 70% not bad. Bought it back at $2.30 on 4-7-09 closed out on 4-14-09 for 454% gain! Wow! I love it when that happens. So, thanks the encouragement to get back in when others were saying sell, sell, sell. Keep up the good work.”

TERENCE
“Rick – Thanks for Dendreon – it has made all the headlines today! I missed on RIMM earlier, but I’ve been holding onto DNDN calls since 3rd week March. Of course today it all paid off today, as DNDN rocketed up.”

Jan. 31 2012
Rick, new member...Studied all current trades, did some chart work,picked ZNGA, PEP, MGM...Sold on Feb. 2 for $3600.00 profit...Cost for 1-year membership to your newsletter was less than $1000.00..All I have to say..Thank you. John H –

3/18/11
Rick, I purchased 10 contracts of the Nike March 85 puts Thursday afternoon for $2.00. Thing is, I was upset because the puts went down to $1.60 or so before the market closed. Well, needless to say Nike didn’t impress Wall Street and when I turned on the computer this morning the puts were worth $7.10! Sold them for a $5,100 profit!. Thanks again, you are the MAN. Chuck J-

2/3/12
Hi Rick,

I will start off with a thank you for your time and dedication to all
the research you and your team commit yourself to. This is not me just being excited about the profits I have accumulated aka (bank) ! You have helped me get back to the passion I had of researching stocks/options. Keith N-

Hi Rick,

I want to share my great results on GMCR. Based on your comments on February 15th, I bought 20 options at $0.28. They closed today at $7.00, which is a 2,300% gain. My $560 dollars turned into $14,000 in less than a month. In decades of trading, this is my single best trade ever. Thank you! By the way, the Dow was down 228 points today and I could care less. What a great trade. It proves the amazing power of options. I am so grateful for your service, which calls it straight all the time, your options trading manual, and most of all, your amazing skill
at finding winning trades. I have attached a copy of the trade from
my brokerage screen.

Posts Tagged ‘Home Depot’

Home Depot and Lowe's Trade Lower/ Trading Service Update

Market Looking For Answers

Home Depot Option Calls up 50%

Tax-Refund Plays