Lowe's Stock: More Work Needs to Be Done on the Charts

Lowe's Companies (LOW) was reviewed at the end of February. At the time I wrote that, "It looks like LOW could give back much of its rally from the November low. Chart support should be found in the $85-$80 area." Glancing at the charts this morning I can see that LOW retreated into the $85-$80 support area and bounced in recent sessions. Can we expect some further upside gains? Let's review the chart and indicators again.

In this updated daily bar chart of LOW, below, we can see that prices are above the declining 50-day moving average line and the still rising 200-day average line. It is possible that the 50-day line may briefly go below the 200-day line for a late dead cross, however, if LOW rallies in the near term this dead cross is likely to be reversed. The daily On-Balance-Volume (OBV) line shows weakness to the end of April and some minor strength since that low. In the bottom panel is the 12-day price momentum study which shows higher lows from March to April even as prices made lower lows. This difference between the price action and the indicator is a bullish divergence and can foreshadow higher prices ahead....159 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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