Two stocks to watch right now: HD & BIDU

While currencies are hard to forecast, the stock market is still “business as usual” for now, and there are plenty of day trading opportunities if you are willing to expand your portfolio. Here are two stocks you might want to research — but don’t wait too long.

Home Depot bearish momentum might be shifting

Shares in Home Depot, Inc. (HD) are trading at a loss compared to the opening of 2023,  currently sitting at minus 9%. The company is expected to report its earnings for the fiscal quarter (ending April 2023) on May 16, before the market opens. The consensus EPS is $3.81 compared to the result for the same quarter last year of $4.09.

With the dividend yield at almost 3% and the payout ratio at around 45%, the company is an attractive addition to any portfolio, especially in the long term. The retail giant is looking financially healthy, holding a 140% cash reserve since the previous ratio figure in January 2023. This suggests they have the ability to overcome short-term market turbulence.

On the technical side, the price is trading in an overall bearish momentum with the 50 SMA still well below the 100 SMA. The Stochastic oscillator, near the extreme oversold level, indicates a minor upside correction might be coming in the following sessions. The lower Bollinger band is acting as a support on the price for the time being, while the 50 SMA is acting as a resistance on the price.

All in all, the coming sessions are important for the price of the share because they could indicate the short-term direction of the trend depending if it manages to break above the 50-day moving average or the lower Bollinger band.

Baidu’s share profits wiped in the first quarter

Baidu, Inc. shares (BIDU) lost all of the profits made in the first quarter of the year, and is currently trading close to early January levels. The company is expected to report its earnings for the fiscal quarter (ending March 2023) on May 16, before the market opens. The consensus EPS is $1.57 compared to the result for the same quarter last year of $1.38.  

Xiaodu Technology, the artificial intelligence division of the Chinese internet giant, is set to release its inaugural mobile phone in late May, which is great news for Baidu’s investors as the company might be integrating its AI bot (ERNIEbot) into the smartphone. This would increase the revenue of the company and potentially give share prices an upside boost.

From a technical analysis perspective, the share is trading on a very strong technical support level consisting of 50% of the weekly Fibonacci retracement level, and also just above the lower Bollinger band. Even though the 50-day moving average is still above the 100-day moving average, a convergence looks likely, which is the most probable scenario once all late and aggressive sell-offs have been accounted for.

The Stochastic oscillator is not indicating any overbought or oversold levels, allowing for several major scenarios in the coming sessions.

This is not investment advice. Past performance is not an indication of future results. Your capital is at risk, please trade responsibly.

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Author:

Antreas Themistokleous

Antreas Themistokleous is a trading specialist in Exness. He is a Certified Financial Technician since 2018. As a member of the Society of Technical Analysts, Antreas is implementing advanced use of indicators and patterns to conclude in an action plan for different trading strategies.