I looked over the last few years of HD’s earnings report sentiment to find that the most recent report showed QoQ optimism and roughly average sentiment overall.
The selloff reaction in the stock after earnings is an overeaction and presents a mean-reversion play for dip-buyers.
Investors can profit via my proposed strategy under the expectation that HD does not fall significantly lower than $210 by December 20.
Two weeks ago, Home Depot (HD) reported its Q3 earnings and guidance. The results led to the stock dropping nearly 10% as of December 2. I dove into this earnings report with financial