Lowe's (LOW) told shareholders and analysts Wednesday morning that they beat earnings expectations and raised their forecast. Let's check out the charts and indicators to see if this strength will last.
In this daily bar chart of LOW, below, we can see some bottoming price action since May. Prices found buying interest (support) in the $180-$170 area. An August rally moved prices to the $220 area before retreating again back to the base. The August rally failed at the declining 200-day moving average line but this recent advance has rallied above the line. Prices are now above both popular averages.
The On-Balance-Volume (OBV) line improved from June to August and then moved sideways. The Moving Average Convergence Divergence (MACD) has just moved above the zero line for a buy signal. A close above the August zenith is key to continued gains.
In this weekly Japanese candlestick chart of LOW, below, we see a mixed to positive picture. Prices are above the 40-week moving average line. The weekly OBV line is still in a downward trend and does not confirm the price improvement. The MACD oscillator is rising but has not yet crossed above the zero line.
In this daily Point and Figure chart of LOW, below, we can see an upside price target in the $245 area.
In this weekly Point and Figure chart of LOW, below, we can see that prices have broken their August zenith and a price target of $304 is revealed.
Bottom line strategy: LOW is off its best levels of Wednesday's trading and I have no idea where they will close. The weaker the close the more likely we'll have pullback. We may or may not want to be a buyer depending on the broad market averages.
