Speaking at the Goldman Sachs Retailing Conference in New York, Home Depot CEO Frank Blake stated that he expects weakness in the macro environment through the end of the year and into 2008. Blake noted, We have tended to the more pessimistic side on the housing market in the past and probably not quite pessimistic enough. Blake added that the company had been hoping for a bottoming and recovery of the housing market in the back half of 2007. As for that bottom and recovery, Blake told the gathered masses, We don't think that's going to happen.
Yesterday, I took a look at heavy put and call activity on HD along with the stock's recent performance. I noted that the 32 level could act as support as needed . . . it seems that the 33 level would rather fill that role today. After the stock plummeted in the first 5 minutes of trading, 33 acted as a springboard for the shares, helping them rebound to their current perch. Keep an eye on 33 going forward; the shares may not challenge its support again today, but this level could be a last line of defense if the stock continues to fall. A couple of weeks ago, I took a look at HD and noted that the top rail of its current trading range appears to be contracting . . . is it also happening with the bottom rail?