For his second "Executive Decision" segment of Wednesday's Mad Money program, Jim Cramer spoke with Marvin Ellison, chairman and CEO of Lowe's Cos. (LOW) to learn more about the company's exceptional quarter and how it has been able to upstage Home Depot (HD) .
Ellison explained that Lowe's has split its efforts between serving professional customers and DIY customers.
Each Lowe's store is also localized, Ellison added. They've hired a team of field merchandisers that know their local markets.
Lowe's has also revamped its delivery services. Instead of stocking every store with every SKU, Ellison said each market now has a single distribution center where orders are most often delivered the very next day. The new market delivery system improves sales and profitability with less inventory and offers better delivery times and customer experiences.
Ellison touted Lowe's profit sharing program, which provided $91 million worth of bonuses to hourly employees this quarter. Lowe's is also actively helping minorities pitch new products and services to the company.
Let's check out the charts and technical indicators of LOW.
In this daily bar chart of LOW, below, we can see that prices dipped on Tuesday to test the rising 200-day moving average line. Prices rallied sharply on heavy volume on Wednesday and closed above the 50-day moving average line.
The On-Balance-Volume (OBV) line peaked in April but now shows, hopefully, the start of renewed strength. The Moving Average Convergence Divergence (MACD) oscillator is still below the zero line.
In this weekly Japanese candlestick chart of LOW, below, we can see a lower shadow in the most recent candle that so far is a successful test of the rising 40-week moving average line.
The weekly OBV line has been steady the past year. The MACD oscillator is pointed down but it has been narrowing towards a bullish crossover.
In this daily Point and Figure chart of LOW, below, we can see that the software is projecting the $246 area as a potential price target.
In this weekly Point and Figure chart of LOW, below, we can see a downside price target in the $162 area.
Bottom line strategy: The recent test of the 200-day line (a.k.a. the 40-week line) is normally a good buy signal but weakness in the broad market gives me pause. Let's sit out a few days to see if LOW can be independently strong.
