Home Depot Inc. (HD) shares are bouncing around Monday as investors position themselves ahead of earnings due Tuesday morning. It's been a rough stretch for the home improvement retailer, with the stock down more than 8% over the past three months since its last earnings report.

What's at Stake This Week

Home Depot is scheduled to report third-quarter results on Tuesday before the opening bell. Wall Street is expecting earnings per share of $3.85 on revenue of $41.14 billion.

The last earnings report wasn't pretty. In the second quarter, the company posted earnings per share of $4.68, missing the consensus estimate of $4.71. Revenue came in at $45.28 billion, also falling short of the $45.36 billion consensus. Making matters worse, Home Depot reaffirmed full-year guidance of $163.98 billion, which sat below analyst estimates of $164.30 billion.

Analysts Are Getting Cautious

Leading up to Tuesday's report, several analysts have been busy adjusting their price targets, and not all of them are feeling optimistic. Stifel characterized the home improvement space as "at best, stagnant and potentially deteriorating," adding that the near-term outlook is simply too challenging for the firm to maintain a bullish stance. Here's the rundown of recent analyst moves:

• Stifel analyst W. Andrew Carter downgraded Home Depot from a Buy rating to a Hold rating and slashed the price target from $440 to $370.
• Telsey Advisory Group analyst Joseph Feldman maintained an Outperform rating on Home Depot with a price target of $455.
• Wells Fargo analyst Zachary Fadem maintained an Overweight rating on Home Depot and lowered the price target from $450 to $435.
• JPMorgan analyst Christopher Horvers maintained an Overweight rating on Home Depot and lowered the price target from $452 to $444.
• Truist Securities analyst Scot Ciccarelli maintained a Buy rating on Home Depot and lowered the price target from $454 to $421.
• Bernstein analyst Zhihan Ma maintained a Market Perform rating on Home Depot and raised the price target from $403 to $406.

The consensus price target for Home Depot currently stands at $431.85, with estimates ranging from a low of $318.00 to a high of $497.00.

Technical Picture Shows Oversold Conditions

Home Depot stock is trading within its 52-week range of $326.31 to $439.37. The stock has declined 6.8% year-to-date, reflecting a challenging market environment for the company. The relative strength index (RSI) sits at 28.79, indicating that the stock has reached oversold territory, which could suggest a potential rebound if buying interest materializes.

From a technical standpoint, Home Depot is trading roughly 7.9% below its 50-day moving average of $393.13 and about 4.7% below its 200-day moving average of $379.62. Both of these moving averages serve as important indicators of the stock's longer-term trend, and trading below both suggests bearish sentiment is dominating right now. The nearest resistance level sits at $376.00, which could present a hurdle for any upward price movement.

With no clear support levels emerging from recent price action, the 50-day moving average may become a critical support point going forward. If the stock price approaches this level, it could provide a foundation for potential buying opportunities, particularly if the RSI begins showing signs of recovery. The 52-week low of $326.31 also represents a significant psychological level that traders are likely watching closely.

Given the current technical setup, a decisive move above the resistance at $376.00 could signal a shift in momentum and potentially lead to a test of the 50-day moving average. On the flip side, sustained pressure below this level may reinforce the bearish sentiment, which means investors should proceed with caution.

HD Price Action: At the time of publication, Home Depot shares were trading 0.35% lower at $361.07.