Lowe's Companies, Inc. (LOW)

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Our View

Lowe’s is a major retailer of home improvement goods and is the second-largest hardware chain in the US and the world. It has a very strong brand and a reasonably wide competitive advantage arising out of its low-cost position as well as its efficient supply chain. The company’s business depends significantly on home-building activity in the US and around the world. These prospects may not be great in the near-term but the housing market is projected to grow in the long term. Given Lowe’s scale and competitive strengths, it is expected to grow in the long term.

The 20-year monthly chart demonstrates the long-term uptrend that the stock has been in. Recently, the stock fell about 30% from its January 2020 highs and broke the long-term trend channel. However, it made a pullback in April 2020 and retraced 30% from its monthly low. The price has stayed above the bottom of the longer term trend in May and looks poised to test the resistance level at around 116-119. A long position can be initiated with an initial target of 119 and then a subsequent target of 134, which is the top of the long term trend. Stop loss can be placed below the bottom trend line somewhere below $96   Shown with the red line

Position Taken at $104.46 with stop loss 24>38 % below at $79.  Short term traders take profit at at around the $134  giving a profit in the region of 27 %