Shares of home improvement retailer Lowe's Companies (LOW) are slumping in early trading after the company released their latest quarterly numbers Tuesday morning. Let's see what the early drop in the stock price could do to the moving averages and chart patterns.
In the daily bar chart of LOW, below, I can see some weakness before Tuesday's earnings markdown. The shares traded sideways since November. The 50-day moving average line turned lower in early March and the 200-day moving average line shows a struggling rise. LOW should open Tuesday with a gap below both of these lagging indicators.
The On-Balance-Volume (OBV) line shows weakness from late November telling me that sellers of LOW have been more aggressive than buyers for several months before Tuesday's weakness. The Moving Average Convergence Divergence (MACD) oscillator is barely above the zero line.
In the weekly Japanese candlestick chart of LOW, below, I see a less than robust picture. The shares have traded sideways around the 40-week moving average line. The weekly trading volume has been shrinking for several months.
The weekly OBV line has been in a slow decline from early 2022. The MACD oscillator is hugging the zero line.
In this daily Point and Figure chart of LOW, below, we can see the price action through Monday's close. A downside price target of $182 is shown. A trade at $193.55 will refresh the downtrend.
In this weekly Point and Figure chart of LOW, below, a downside price target of $180 is indicated.
Bottom-line strategy: The charts of LOW show some weakness but not a big collapse. It could take several days for LOW to stabilize after testing the downside. Keep your powder dry.
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