Lowe's Companies Inc. is a retailer serving the do-it-yourself home improvement, home decor, and home construction markets. LOW operates 635 stores located in 40 states predominantly in the eastern half of the U.S. For the FY ended 2/2/01, revenues rose 18% to $18.78B. Net income rose 20% to $809.9M. Revenues reflect the Company's ongoing store expansion and relocation program. Net income also reflects the absence of a $24.4M merger cost.

June 7, 2001

Lowes is the country's second largest home improvement retailer behind the guys in the orange bibs. Although, if CEO Robert Tillman has anything to do with it, Lowes won’t be second to the orange folks for long. The retailer just announced a 2:1 split that will be payable on 6/29/01. We are therefore entering this play in hopes of a split run into the payable date two weeks from tomorrow. Looking at the chart, LOW just broke out of a two-week base and set a new closing high. The only drawback we can see is that volume came in light on the breakout. Only 2.3 million shares were traded as opposed to the three-month average of 3.3 million. Support should be coming in around $70 and resistance is today’s high (and close) of $74. Traders thinking about getting into LOW should look to do so on a strong open and break above $74. Volume will naturally be lighter since tomorrow is Friday, so more conservative traders may wish to wait until next week to get a true read on the stock.

Picked on June 7 th @ $74.00
Change Since Picked 0.00
Stop Loss @ $68.00

June 14, 2001

Lowes fell victim to overall weakness within the market on Thursday. The stock lost $0.97 on low volume of 1.7 million shares. The stock did find good support at its 10-dma at $72.17 and managed to close in the upper half of its intraday range. Resistance is still present at $74, so traders shouldn't look to initiate new positions until this resistance is conquered on volume of at least 3.2 million shares. Our stops remain at $68 to limit downside risk.

Picked on June 7th @ $74.00
Change Since Picked -1.07
Stop Loss @ $68.00

June 12, 2001

Our home improvement retailer sold off in the early going on Tuesday, but found good support at its 20-dma at $70.75 and bounced higher. LOW closed the day with a slight gain of $0.85. We will be looking for volume to pick up going forward into the latter part of this week and for the MACD to issue a buy signal. A few more up days like today and the MACD should go positive. For now support remains at the 20-dma of $70.75 and resistance has come in at $74.00. Therefore, traders should hold off on getting into LOW until resistance at $74 is conquered on volume of at least 3 million shares. Our stops remain at $68 to limit downside risk.

Picked on June 7th @ $74.00
Change Since Picked -1.25
Stop Loss @ $68.00

June 10, 2001

Lowes closed the week out with a bullish hammer formation that has us thinking that next week's trading could be kind to our retail play. In addition, the S&P Retail Index (RLX.X) closed up 10 points on Friday to 906.76, keeping the index over support of 900. Turning to LOW's chart, we see that volume during LOW's Friday pullback was very light, with only 800,000 shares changing hands. This tells us that sellers had very little conviction. Add to this is the fact that LOW's MACD just went positive and you have the recipe for another leg higher. However, traders wishing to enter LOW should wait until the stock can break above resistance at $74.00 before committing any capital to this play. For reference, support should come into LOW around $72.50.

Picked on June 7th @ $74.00
Change Since Picked -0.42
Stop Loss @ $68.00