NEW YORK (TheStreet) -- Shares of Lowe's (LOW) have been stuck in a tight range since their ugly May 20 breakdown. The stock has been consolidating since the company's disappointing first-quarter report, but has remained in a somewhat vulnerable position. This week, Lowe's has retested last month's low of $67.60 and has managed a slight bounce off that key support level.
It's unlikely that the stock will stage a strong rebound at this point. A break under the May low appears to be the stock's near-term course.
Once Lowe's falls below the $67.50 area, it will be headed for a major support zone. As the stock begins to pierce $66, its 200-day moving average will come into play for the first time since last August. Just below this level is Lowe's 2015 low, set back in early January at $65.35. For patient bulls, that support zone will present a low-risk entry opportunity. Downside momentum will likely pick up once again as the May low is taken out, but will probably ease as major support nears.
If Lowe's can build a short-term base as it tests its initial 2015 low, a healthy rally could develop. The stock would return to an oversold MACD (moving average convergence/divergence) reading not reached since the summer of 2012 once the $66 area is penetrated. If Lowe's fails to hold and closes below $64, it would indicate a lack of investor interest near a major support zone. A significant bottom may be quite a ways off it that is the case.Click here to see the below chart in a new window.