Lowe’s companies, Inc. (LOW) reported better-than-expected revenue at the publication of the results of the 20 May. The home improvement retailer gapped higher to $122.69 and then dropped to $115.52, will host its quarterly pivot at $115.57 as a buying opportunity.
The stock closed last week at $122.25, up 2.1% year to date, and in the bull market territory at 103.8% above its March 19 low of$ 60. Lowe’s stock is also 3.5% below its Feb. 28 all-time intraday high of $128.23.
Lowe beat the earnings per share (EPS) estimates for the third consecutive quarter, and the stock is at a reasonable price. Its P/E ratio is 19.50 with a dividend yield of 1.80%, according to the trends.
The daily chart for Lowe’s
The daily chart for Lowe’s shows that the stock had been above a cross of gold since June 8, 2019. This buy signal occurs when the 50-day simple moving average rises above the 200-day simple moving average to indicate that higher prices will follow.
The stock was a purchase of 200-day simple moving average at $100.39 on 8 June 2019. Lowe’s shares gapped higher on August. 21 on a positive reaction to the result. The stock is then moved to the 50-day simple moving average to its intraday high of $126.73 on Feb. 20.
Since then, Lowe’s stock in a cascade below its March 19 low of$ 60.00. The 50-day simple moving average failed to hold the Feb. 25. The semi-pivot at $112.65 failed to hold on 5 March, just as the 200-day simple moving average failed to hold. This has led to the accident of March 19 low.
A death of the cross was confirmed on 25 March that the stock was on the rise. It was a reason not to focus on this signal at the time. The V-shaped rally has been the 50-day simple moving average, April 24. The Can rotate up to $104.91 was taken on the 4th May.
Lowe’s stock and then is back above the 200-day simple moving average, the 5 May, setting the stage for additional gains. The close above the semi-pivot at $112.65, May 15, to prepare the ground for a positive reaction to the publication of the results of the 20 May. The gap of more than $122.69 on this report was followed by a dip to the quarterly pivot at $115.57 as a buying opportunity.
The weekly chart for Lowe’s
The weekly chart for Lowe’s is positive, with above its five-week modified moving average at $107.59. The stock is also above its 200-week simple moving average, or “mean reversion”, at $93.23. The 12 x 3 x 3 weekly slow stochastic reading is increased to 71.36 in the last week, an increase of 63.3 15 May.
Trading strategy: Buy Lowe’s shares on the weakness of the semi-annual and quarterly value levels at $115.57 and $112.65, respectively, and to reduce their holdings at the effective annual risky level is $135.92.
How to use my value levels and risky levels: The share price closing price on Dec. 31, 2019, has been an entry to my proprietary analytics. Half-yearly and annual, the levels are still on the charts. Each calculation uses the past nine closes in these time horizons.
The second quarter of 2020 the level has been established based on the 31 March, close by, and the level of the month of May was established based on the April 30 close. New weekly levels are calculated following the end of each week, while new quarterly levels occur at the end of each quarter. Half-yearly levels are updated at mid-year, the levels are set throughout the year.
My theory is that nine years of volatility between the farm are to assume all possible bullish or bearish event for the stock are taken into account. To capture the volatility of stock prices, investors should purchase shares of the weakness of a plan, the value and reduce the holdings of the strength to a risky level. A pivot is a level value of the risk level that was violated in its time horizon. Hubs act as magnets that have a high likelihood to be re-tested prior to their time horizon expires.
How to use 12 x 3 x 3 weekly slow stochastic readings: My choice of using 12 x 3 x 3 weekly slow stochastic readings has been based on the backtesting of many methods of reading the stock prices of the momentum with the objective of finding the combination that resulted in the least number of false signals. I’ve been following the stock market crash of 1987, so I was happy with the results of more than 30 years.
The stochastic reading covers the duration of 12 weeks, high, low, and close for the stock. There is a row of calculation of the difference between the highest and the lowest compared to the farm. These levels are modified for a fast reading and slow reading, and I found that the slow playback will work best.
The stochastic reading scales between 00.00 and 100.00 with readings above 80.00 considered as overbought and readings below 20.00 regarded as oversold. A reading above 90.00 is considered to be a “swell parabolic bubble” of the training, which is usually followed by a decline of 10% to 20% over the next three to five months. A reading below 10.00 is considered to be “too cheap to ignore”, which is usually followed by a gain of 10% to 20% over the next three to five months.
Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.