NYSE:LOW may be ready to breakout.

A possible breakout setup was detected on Lowe's Companies (NYSE:LOW) by our stockscreener. A breakout pattern is formed when a stock consolidates after a strong rise up. We note that this pattern is detected purely based on technical analysis and whether the breakout actually materializes remains to be seen. It could be interesting to keep an eye on NYSE:LOW.

Technical Analysis Observations

ChartMill assigns a proprietary Technical Rating to each stock. The score is computed daily by evaluating various technical indicators and properties. The score ranges from 0 to 10.

Taking everything into account, LOW scores 8 out of 10 in our technical rating. This is due to a decent performance in both the short and medium term time frames. Compared to the overall market, LOW is only an average performer.

• Both the short term and long term trends are positive. This is a very positive sign.
• LOW is currently trading in the upper part of its 52 week range. The S&P500 Index however is currently trading near a new high, so LOW is lagging the market slightly.
• LOW is currently showing a bull flag pattern! A bull flag pattern occurs when prices pull back slightly after a strong rise up. This may be a nice opportunity for an entry.
• When compared to the yearly performance of all other stocks, LOW outperforms 60% of them, which is more or less in line with the market.

How do we evaluate the setup for NYSE:LOW?

Next to the Technical Rating, the Setup Rating of a stock determines to which extend the stock is consolidating. This score also ranges from 0 to 10 and is updated daily. The setup score evaluates various short term technical indicators. For NYSE:LOW this score is currently 8:

Besides having an excellent technical rating, LOW also presents a decent setup pattern. We see reduced volatility while prices have been consolidating in the most recent period. There is a resistance zone just above the current price starting at 208.25. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 204.71, a stop order could be placed below this zone.

How to trade NYSE:LOW?

A breakout could materialize when the stock breaks out to new highs above the current consolidation zone. One could wait for this to happen and buy when this happens. A stop loss could be placed below the consolidation zone.

Of course, there are many ways to trade or not trade NYSE:LOW and this article should in no way be interpreted as trading advice. The article is purely based on an automated technical analysis and just points out the technical observations. Always make your own analysis and trade at your own responsibility.

Every day, new breakout setups can be found on ChartMill in our Breakout analyzer.