Saturday, February 5, 2011

Is Office Depot, Inc a Short Candidate?

 Recently I have a chat with my visitor to my blog on Office Depot. We want to know whether it is a short candidate.

Without wasting any time, I immediately proceed with my technical and fundamental analysis to get a detail picture on this stock.
Click on the above image to enlarge
Based on the long term chart for this stock, this stock is currently on a trading range between the price of $3.50 and $8.20. In the near future, I expect this stock to go up and test the strong first resistance of $8.20. If it can manage to break this resistance, then I expect this stock to go up further to fill the downward gap which has occurred on July 7, 2008.

Click on the above image to enlarge

As per the short term chart, this stock is currently at the upward trading range. It has recently found its support on Jan 28, 2011 which is at the bottom of the line. It manage to bounce back strongly to the current price of $ 5.63. I believe this stock might go upward and test the top line of the trading range at the price of $ 6.50. Once it touch the upper line, then it might consolidate and go lower back and test the bottow line. This will continue until it manage to break the upper line or bottom line and it did so, the upward trading range will no longer prevail.

The MACD and Stochastic indicator points to a strong buy. The heavy volume recorded on the Dec 17, 2010 indicates a change of direction. It shows that the bull has battled fiercely with the bear and has won this battle. True enough this stock goes upward from then on and hit the high of $6.15.

Based on the technical analysis above, I would predict that this stock will continue upwards until it hit the recent high of $6.15. Once it happened, we will then see again what will happen from there onwards.

Click on the above image to enlarge

Click on the above image to enlarge
(from CNBC website)

Based on the fundamental analysis, this stock shown an earning decreased starting from 2008 to 2010. Although it has shown some improvement, this stock still did not show any profit yet. Based on the analyst estimate, Office Depot will only show profit in 2011.

Based on the poor earning, this stock is definetely not in my radar for long term investment, however, for short term investment, 1-4 weeks, this stock is a good bet for long for those risk taker.

Disclaimer : This is not an investment advisory, and should not be used to make investment decisions. Information in The Market Oracle Blog is often opinionated and should be considered for information purposes only. No stock exchange anywhere has approved or disapproved of the information contained herein. There is no express or implied solicitation to buy or sell securities. The charts provided here are not meant for investment purposes and only serve as technical examples. Don't consider buying or selling any stock without conducting your own due diligence. 

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