A resistance level has emerged in the chart of Lowe’s Cos. (LOW). If the resistance level is broken, a breakout could occur.
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 the demand in the home improvement market due to people spending so much time at home. LOW is also seeing strength from its new total home strategy. The strategy entails providing a complete set of products and solutions for various types of home repair and improvement.
LOW has plenty of cash on hand finishing the last quarter with $10.1 billion. This compares favorably with its short-term debt of only $609 million. The company has also shown efficiency with a high return on equity of 131.3%.
The demand for home improvement has resulted in earnings growth of 29.3% over the past year. Revenue is up 18.2% over the past year as well. Even with all that growth, the stock is trading at a reasonable multiple with a trailing P/E of 22.14.
LOW is up 9% year to date and has shown bullish strength over the near term, resulting in a Momentum Grade of A in our POWR Ratings system. This is reflected in the chart below.
Take a look at the 1-year chart of LOW below with added notations:
After hitting a high of $180 back in October, and then declining for several weeks thereafter, LOW eventually rallied off its $150 support. However, the stock ended up stalling at the same $180 resistance (red).
A solid close above that $180 mark should lead to much higher prices for the stock. The possible long position on the stock would be on a breakout above that level with a protective stop placed under it.
Want to Discover More Great Trades?
I have explored virtually every flavor of technical analysis and chart pattern known to mankind. The sad fact is that the vast majority of them don’t work at all.
That is why I recently put together this special report to help investors focus on the only 5 chart patterns that matter…the ones that lead to the most timely and profitable stock trades. Click below to get your copy now!
5 WINNING Stock Chart Patterns
Have a good trading day!
Good luck!
Christian Tharp, CMT
LOW shares fell $0.94 (-0.54%) in premarket trading Thursday. Year-to-date, LOW has gained 8.60%, versus a 5.43% rise in the benchmark S&P 500 index during the same period.
About the Author: Christian Tharp
I am an expert stock market coach having helped over 4000 beginner and advanced traders & investors from around the world take control of their financial futures. I also write stock market related articles for the Adam Mesh Trading Group and Yolo Publishing. More...
More Resources for the Stocks in this Article
| Ticker | POWR Rating | Industry Rank | Rank in Industry |
| LOW | Get Rating | Get Rating | Get Rating |
