Wallace,
I took profits on all my put positions a couple days ago, including HD. It looks like I was a little early on HD, but you can't lose money taking profits. I do shop at both Home Depot and Lowe's, and honestly, it would be hard to say which is worse. HD recently decided to reduce their inventory by around 15%. In retail that means when customers can't find what they want one place, they go someplace else. HD also plays a lot of games with their use of GAAP. There's a ton of off balance sheet liabilities and it's a mystery to me how they get away such a complete lack of disclosure in their filings in certain areas. Insiders have both hands in the cookie jar, and are sucking money out of the company as fast as their grubby little hands can grab.
On the flip side, I closed my short position because I thought there might be some near term upside risk in the stock. About the best I can suggest is to see what it does, and if support holds at $26.10. If it bounces off support, you might see a double bottom type reversal, if support breaks, it would tend to confirm the downtrend is still in effect. I hate trying to make a call in this kind of area of a chart because there just plain isn't anything to go on. If you're feeling lucky maybe the trick would be to throw some chump change at it with options on a straddle play. It is volatile, and slightly out of the money options are fairly reasonable in the three to six month range. I'd have a hard time recommending it as a buy and hold play to fall in love with, but there might be a trade in there someplace.
This has to be the strangest market I've ever seen. The Dow is almost as volatile as Internet stocks were a few years ago. I guess if a person likes a certain entry or exit point, just wait a few days and see if it show up. Weird. |
