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Lowe's Slips on Earnings: Here's Where to Buy It

Lowe's is moving lower after its earnings report. After the stock's big rally, that's no surprise. Here's where to consider going long.

Lowe’s  (LOW) - Get Lowe's Companies Inc. Report is not doing well on Wednesday, down 2% after the home-improvement retailer reported earnings.

That reaction should come as very little surprise, for several reasons. First, it doesn’t help that the broader market is lower on the day amid a meltdown in crypto.

Home Depot  (HD) - Get Home Depot Inc. (The) Report also traded lower despite blowing out its quarterly expectations. In fact, Walmart  (WMT) - Get Walmart Inc. Report struggled to rally too, despite strong results.

The Lowe’s story is similar. The company beat earnings expectations but the bulls aren’t gobbling up the stock in response.

But keep in mind that Lowe's shares rallied 43% from the March low to last week’s high. In that light, the stock’s modest post-earnings performance seems more reasonable — perhaps even attractive.

That said, Lowe’s is now down in six of the previous seven trading sessions.

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Trading Lowe’s Stock

Daily chart of Lowe's stock.

Daily chart of Lowe's stock.

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On the chart, you’ll notice Lowe’s is in a bit of a no man’s land right here.

I happened to have an old trendline drawn in from the November low, and for now Lowe’s seems to be finding its footing near this mark. But I don’t like to stake my hope on Lowe’s holding that level.

Regardless, there’s a way to navigate this one.

On a move lower, the 21-week moving average and the $180 breakout level could be in play. This could be a potentially great buying opportunity.

On the upside, let’s see if the stock can reclaim the 10-week and 50-day moving averages. Watch to see if these measures act as resistance. If so, sellers could maintain momentum in the short term.

Above these levels puts $196 in play, followed by the 21-day moving average. If it reclaims this measure and the $200 mark, it could put $209 to $210 in play.

Let’s not get ahead of our skis with this one. We’ll take it slow and let the setup come to us. 

If we get a break lower, it could lead to a buying opportunity. On the upside, a rotation and reclaiming key marks could lead to a solid trading opportunity as well.