Office Depot (ODP)

Company

"Office Depot, Inc. is a global supplier of office products and services. The company was incorporated in 1986 with the opening of our first retail store in Fort Lauderdale, Florida. In fiscal year 2009, we sold $12.1 billion of products and services to consumers and businesses of all sizes through our three business segments: North American Retail Division, North American Business Solutions Division and International Division. Sales are processed through multiple channels, consisting of office supply stores, a contract sales force, an outbound telephone account management sales force, internet sites, direct marketing catalogs and call centers, all supported by our network of supply chain facilities and delivery operations." (company website)

odp(2-1)
ODP 4-month chart
odp(2-1)_1yr
ODP 1-year chart

Buy

5 April 2010. Bought 500 at $8.22.

After turning in a nice earnings Surprise by beating Expectations, Office Depot climbed steadily to a resistance level just around $8.20. It has been at that level for about three weeks, and the Bollinger bands are starting to narrow noticeably, generally a precursor to a price move (which could be up or down).

  • Percentage price oscillator (PPO) — consistently below the signal line for about two weeks
  • Volume — somewhat mixed: high positive volumes after earnings, but in recent weeks there have been sell-offs as ODP stalled at resistance

Based on technical analysis, MarketEdge calls ODP a "strong buy" in a "strong upward trend."

Sell

gain Bottom line
-4%

13 April 2010. Sold 500 at $7.87.

My stop-loss order was triggered this morning, closing the position with a small loss. The Bollinger bands have narrowed greatly, usually a sign of an impending price move — up or down. ODP broke below resistance ($7.97) this morning so it looks like a dip is in the offing. MarketEdge still calls this a "buy" in a "strong upward trend" but it looks different to me. The convergence of the PPO line up to the signal line never materialized, and the gap is widening today. I'm happy to be stopped out.