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.
On May 27, Goldman Sachs (GS) upgraded shares to “buy” with a price target of $7.
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.