Mark Holder
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Mark Holder in Out Fox The $treet,

Home Depot: Down She Goes

Home Deport (HD) reported generally inline FQ2 numbers, but the stock is trading down. Based on the valuation, the home improvement retailer needs better numbers than matching estimates. 

The company did raise guidance to $6.31 for the current fiscal year, up from $6.27 prior. The guidance is clearly built into the stock price trading above $136, or nearly 22x EPS forecasts. 

A big concern for longs is that the stock initially rallied to $138.65 before turning lower for the day. Failure to make new highs is the sign of a potential top for Home Depot. Investors should watch for similar results when Lowe's (LOW) reports tomorrow. 

Disclosure: No position