DailyPlay – Lowe’s Companies Inc (LOW) – January 13th, 2022

The bearish DailyPlay for Thursday, January 13th is Lowe’s Companies Inc (LOW). LOW is part of the Discretionary sector that is currently underperforming the S&P 500. 

Technical View

• Negative divergence occurred when price made new highs but momentum made lower highs. Typically a strong bearish signal. 
• Bearish 1M trend. 
• Failing to break above 55 D EMA as momentum continues to slow. This provides evidence of a further decline and possible break below the $240 support level. 

Fundamental View

• Poor sub-industry outlook as homebuilders as consumer spending starts to slow. 
• Inflation and labor shortages are major headwinds. Construction wages have risen 7.7% since pre-Covid levels. 
• Earnings: Feb 23, 2022 (41 days)

As this is a Credit Spread, look to take profits at 50% gain and cut losses at 100%:

Take Profits: $2.05 Debit

Stop Loss: $8.20 Debit

View LOW Trade