Hence, the argument forwarded here is that the U.S. housing market is approaching a bottom, and that fact, combined with lower job lay-offs, will begin the long, incremental process of revenue gains at HD. However, this is not to say that the U.S. will return to the leverage-fueled home renovation and home building days of 2002-2007, but renovations should pick up enough to propel HD's sales and earnings higher. The First Call FY 2010/FY 2011 EPS estimates for HD are $1.35 to $1.53.

Other positives: Home Depot's customer service improvements should help generate customer loyalty, and the U.S.'s aging stock of homes also bodes well for HD. Like those Americans who can't buy a new car, those aging homes (like used cars) will have to be maintained, as homeowners may be living there for awhile.

That said, HD remains a high risk stock, and any hint that the U.S. economy will not recover in the second half of 2009 will send shares tumbling, so a tight Stop has been deployed. Technically, HD's chart also displays double-bottom support around $17.

Stock Analysis: The Home Depot is a high-risk stock. Don't Buy HD if you can not tolerate high risk. Consider buying a 25% position in HD now; then buy another 25% in three months, if U.S. economic conditions don't worsen substantially. Under any circumstance, don't buy more than 50% of your HD position in the first half of 2009. Sell/Stop Loss if you were to buy shares in this company: $16.

Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.