A number of big-name tech and retail companies are set to report earnings results this week including The Home Depot Inc. (HD), Hewlett-Packard Company (HPQ), and Target Corp. (TGT). Investors will also be paying close attention to housing starts, which will be released on Tuesday.
Hewlett-Packard is set to report its quarterly results after the bell Tuesday, and analysts polled by Reuters are expecting a profit of $0.85 per share, up from $0.87 per share a year ago, on revenue of $27.4 billion.
Traders playing this stock into earnings should know that it strongly favors a pattern where it follows through with more aggressive next-day regular session trade following an earnings-driven after-hours move. Traders going long should stick with their trade in the regular session if the stock makes a move higher in the pre-market. HP has moved more aggressively in the same direction the next day in 13 of 21 quarters. In the near term, it has added to its evening performance in next-day trade in the last five consecutive quarters.
The Home Depot is due to report first-quarter results before the bell on Tuesday, and analysts are expecting earnings of $0.28 per share, down from $0.41 a year ago, on revenue of $15.9 billion.
In the near-term, Home Depot is trending toward a widening pattern, adding to its extended-hours performance in follow-on regular session trade in all of the last four earnings events. On February 24, the stock gained 5% in the pre-market after its profit topped the Street by four cents a share. The stock widened its pre-market move in the regular session, ending up 10.5%.
Stocks breached their November lows last week and investors will be closely watching to see if they break below their newly set lows. Also this week, the latest readings on gross domestic product and durable goods orders will likely move markets.
