Office Depot (ODP) — On May 19, S&P upgraded the stock from “hold” to “strong buy” and raised its 12-month target from $6 to $8. It also increased it 2014 earnings per share projection $0.04 to $0.15, saying it sees increased potential benefits from its merger with OfficeMax, including the closing of more than 400 stores by the end of 2016.
ODP broke from a bear channel on May 6 after blasting from a breakaway gap that sliced through both its 50-day and 200-day moving averages on very high volume.
That was followed by a continuation gap in June.
On May 20, I suggested traders buy a partial position immediately and a full position if the stock dipped under $5.
The stock traded as low as $4.93 that week, and I hope readers took advantage and now have a full position under $5.
If not, there is still time to buy ODP for a trade to $7 or as a long-term hold with a target of $10.
— Sam Collins, Trade of the Day
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