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Trade of the Day: Home Depot, Inc. (HD)

John Jagerson and Wade Hansen

To receive further updates on this Home Depot, Inc. (NYSE:HD) trade as well as an alert when it’s time to take profits, sign up for a risk-free trial of SlingShot Trader today.

We are opening a new bullish trade on Home Depot (NYSE:HD). The economics of business success always boil down to the simple concepts of supply and demand and, right now, HD is providing the supply of home-repair products and services while Hurricane Florence is providing the demand for those products and services.

We have seen time and time again the impact hurricanes — like Hurricane Harvey in Houston — and other natural disasters can have on sales numbers for HD as people try to rebuild their lives in the aftermath of tragedy. We don’t expect this scenario with Florence to be any different, especially because it is affecting such a large geographic area. Residents are going to be flocking to HD and spending money for months to come.

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HD broke out of a broadening wedge bullish continuation pattern and above its previous high just below $208 on September 10, and the stock has now come back down to re-test $208 to see if it will hold as a longer-term support level after having served as resistance since late-January. Support seems to be holding, and we anticipate the stock is going to climb back up toward its recent high of $215.43.

‘Buy to open’ the HD October 215 Call (HD181019C00215000) for a maximum price of $3.00.

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InvestorPlace advisers John Jagerson and S. Wade Hansen, both Chartered Market Technician (CMT) designees, are co-founders of LearningMarkets.com, as well as the co-editors of SlingShot Trader, a trading service designed to help you make options profits by trading the news. Get in on the next SlingShot Trader trade and get 1 free month today by clicking here.

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