• Chart of the Day: Lowe’s Companies (LOW)

    by  • May 2, 2013 1:49 pm • Charts to Watch, Quick Hits, Tony Venosa's Chart of the Day • 0 Comments

    Today’s chart is of Lowe’s Companies (LOW) which operates as a home improvement retailer.  It offers a range of products for maintenance, repair, remodeling, and home decorating.

    Ticker:  Lowe’s Companies (LOW)

    Strategy:  Long Trade

    What I Am Looking At:

    • Consumer Discretionary/ Housing have been very strong relative to the broader market
    • LOW outperformance on a year-over-year basis, +23 percent
    • Up nearly 9 percent year-to-date
    • 3-month long triangle pattern forming just under all-time highs and the round number $40 level
    • One concern is the large amount of call open interest for the May series at the 39-strike which could be a roadblock for shares
    • Shorts could be in cover mode as the short interest has dropped 45 percent during the past month
    • Divisive analyst community as 10 out of 20 analysts rate the shares a “hold” or worse
    • Implied volatility on options are the cheapest in over a year
    • Unconfirmed earnings release, May 22nd

    Strategy:  Buy on a triangle break to the upside, looking for a pop above the all-time high set back in February and the $40 level

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    Tony Venosa, CMT is a Senior Options Strategist and works on the trading desk at Schaeffer’s Investment Research. He joined Schaeffer’s in 2010. He has worked in the finance industry for over 15 years. He began his career as a trading assistant in Chicago on the floor of the Chicago Mercantile Exchange. He later moved upstairs and worked as a commodities broker on both the retail and hedging side. He left the brokerage industry to begin his trading career as a proprietary equities trader at a Chicago firm. In 2000, Tony moved backed to his hometown and continued trading his personal account. He later went on to earn his Chartered Market Technician designation. He earned a B.S. in Finance from Miami University. Tony’s main focus is short-term directional option trading.


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