Is a Breakout for Lowe’s in the Charts?

NYSE: LOW | Lowe's Companies, Inc.  News, Ratings, and Charts

LOW – An ascending triangle pattern has formed in the chart of Lowe’s (LOW). If the resistance level is broken, the stock could soon breakout. Read more to learn how to profit from this trade.

An ascending triangle pattern has formed in the chart of Lowe’s Inc. (LOW). This is a bullish pattern and if the resistance level is broken, a breakout is expected.

LOW is the second- largest home improvement retailer in the world, operating about 1,970 stores throughout the United States and Canada. The firm’s stores offer products and services for home decorating, maintenance, repair, and remodeling.

The company has benefited from an increased interest in home improvement projects as the pandemic led to more people staying at home. LOW took action to increase its omni-channel capabilities to allow for both professional and do-it-yourself customers to buy online and pick up at stores.

LOW had $10.1 billion in cash as of the end of its last reported quarter, compared to only $609 million in short-term debt. This has led to a Quality Grade of B in our POWR Ratings system. The company is also highly profitable with an ROIC of 21%.

In terms of growth, LOW’s earnings rose 29.3% last year and at an average of 21.1% over the past five years. Earnings are expected to rise 28.2% this quarter and 51.8% this year. The company has a Growth Grade of B.

LOW has P/E of 24.9 and a Price to Sales Ratio of 1.6, both under the industry average. The stock has shown bullish momentum over the long-term and over the past few months. This has resulted in a Momentum Grade of A.

Take a look at the 1-year chart of LOW below with the added notations:

  Chart of LOW provided by TradingView

While climbing a rough trendline of support (green), LOW has also formed an important level of resistance at $180 (red).  Together, these two lines have formed an ascending triangle, which is a bullish pattern.

The stock just hit the resistance last week and could soon be making another run at that level. A long trade could be entered on a break above the $180 resistance level, with a protective stop placed under the point of entry.

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Have a good trading day!

Good luck!

Christian Tharp, CMT

@cmtstockcoach


LOW shares were trading at $175.92 per share on Thursday morning, down $1.21 (-0.68%). Year-to-date, LOW has gained 9.99%, versus a 4.12% rise in the benchmark S&P 500 index during the same period.


About the Author: christian


Christian is an expert stock market coach at the Adam Mesh Trading Group who has mentored more than 4,000 traders and investors. He is a professional technical analyst that is a certified Chartered Market Technician (CMT), which is a designation awarded by the CMT Association. Christian is also the author of the daily online newsletter Todays Big Stock. More...


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