4 Trade Ideas for Lowe’s: Bonus Idea

Here is your Bonus Idea with links to the full Top Ten:

Lowe’s, $LOW, rose up out of consolidation in October, reaching a top in December. It pulled back from there, eventually retracing 88.6% of that move as it crossed under the 200 day SMA at the end of February. This was the first touch at the 200 day SMA in over a year. It reversed since then and has made a higher low followed by a higher high. It ended the week riding the Bollinger Bands® higher toward resistance at the 38.2% retracement level.

The RSI is moving into the bullish zone with the MACD now positive and rising. There is resistance at 240 and 244.50 then 252.75 and 260 before 263. Support lower sits at 231 and 225.50 before 221 and 210. Short interest is low at 1.3%. The stock pays a dividend with an annual yield of 1.36% and will start trading ex-dividend on April 19th. The company is expected to report earnings next on May 18th.

The April options chain shows the largest open interest below at the 210 put, and then at the 230 and 250 calls. In May action is just starting to build, but the at-the-money straddle shows a 10.25% implied move by expiry. The June chain has big open interest from 230 to 175 on the put side but twice as big as everywhere else at 200. On the call side it builds from 180 to a peak at 230 then falls to 270.

Lowe’s, Ticker: $LOW

Trade Idea 1: Buy the stock on a move over 237 with a stop at 230.

Trade Idea 2: Buy the stock on a move over 237 and add a May 230/210 Put Spread ($6.90) while selling the June 250 Calls ($6.05).

Trade Idea 3: Buy the April/June 240 Call Calendar ($7.25) and sell the May 220 Put ($5.70).

Trade Idea 4: Buy the June 210/240/250 Call Spread Risk Reversal (65 cents).

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After reviewing over 1,000 charts, I have found some good setups for the week. These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday which with the first Fed tightening and March Quadruple Witching behind, saw equity markets with renewed strength.

Elsewhere look for Gold and Crude Oil to pause in their uptrends. The US Dollar Index also looks to consolidate the recent gains while US Treasuries continue the downtrend. The Shanghai Composite looks to continue the trend lower along with Emerging Markets, although the latter might be ready for a reversal.

The Volatility Index looks to be easing from elevated levels making the path easier for equity markets to the upside. Their charts look strong on the longer timeframe. On the shorter timeframe both the QQQ and SPY are showing real promise as they finished at higher highs for the first time in 2022. The IWM also shows some promise as it tests resistance at the long term range. Use this information as you prepare for the coming week and trad’em well.

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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