Home Depot Stock Running into Technical Pressure Before Earnings

Home Depot Inc (NYSE:HD) is preparing to report third-quarter earnings before the open on Tuesday, Nov. 17. Zacks Consensus Estimates anticipate earnings of $3.86 per share on revenue of $42.72 billion, representing year-over-year increases of 3.2% and 3.3%, respectively.

Home Depot stock has a history of fairly muted post-earnings moves. Looking back at the last 12 quarterly reports, HD finished the following trading session higher seven times, averaging an absolute return of 2%, regardless of direction. More recently, the stock fell 0.1% following its latest report, after gaining 0.9% and 2% in the two quarters prior.

The shares were last seen down 0.7% at $348.35 today, taking a breather after hitting a roughly eight-month high last week. The $358 region, which rejected rallies in July and August, appears to be acting as resistance once again. Since the start of the year, HD is holding on to a modest 1.3% lead.

Options traders have been picking up puts at a faster-than-usual pace ahead of the event, though calls are still winning out on an absolute basis. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), HD's 10-day put/call volume ratio of 0.73 ranks in the 88th percentile of its annual range.

Analysts, meanwhile, are leaning bullish. Of the 35 brokerages in coverage, 21 carry a "strong buy" rating, one says "buy," 12 recommend a "hold," and just one sports a "strong sell" rating.