Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Stocks

Lowering the Bar: Why Lowe’s Could Head South

by January 24, 2025
January 24, 2025
Lowering the Bar: Why Lowe’s Could Head South

Despite periodic rallies that have buoyed the home improvement retail sector, Lowe’s (LOW) is showing signs of potential weakness. Recent price action in Lowe’s stock and lagging growth metrics suggest that its latest attempt to sustain a breakout may run out of steam.

Below, we’ll explore the technical and fundamental factors behind this bearish thesis and outline a limited-risk options strategy to take advantage — discovered automatically through the OptionsPlay Strategy Center within StockCharts.com.

Technical Analysis of Lowe’s Stock Price

 After initially breaking above $260 resistance, LOW has spent the past two months attempting to build on its bullish momentum. However, it has since:

Confirmed a false breakout. LOW has since fallen back below the $260 support, negating the breakout and signaling a bearish trend change. Underperformed the S&P 500. During its failed breakout, the stock has lagged the broader market, suggesting weakness ahead. Retest of Resistance. Recently, LOW rallied back to the $260 level, which now acts as resistance, providing a strong risk/reward for adding bearish exposure.

FIGURE 1. DAILY CHART OF LOWE’S STOCK. The stock is showing signs of weakness after a false breakout and a retest of its resistance level.Chart source: StockCharts.com. For educational purposes.

Fundamental Analysis of Lowe’s

 From a fundamental standpoint, LOW also appears vulnerable:

Premium Valuation, Tepid Growth. While Lowe’s trades at around 21x forward earnings, its projected EPS and Revenue growth metrics remain in the low single digits — well below market averages.Weak Profitability. Net margins of only 8% compare unfavorably to the S&P 500’s average of 12%. This relatively thin profitability questions the justification for LOW’s high valuation multiple.

 In essence, the stock’s elevated valuation doesn’t align with its modest growth prospects and subpar margin profile.

Options Strategy for Trading Lowe’s Stock

 The OptionsPlay Strategy Center highlights selling a bear call spread to capitalize on this potentially neutral to bearish view on LOW by selling the March 7 $265/$275 Call Vertical @ $4.20 Credit. This entails:

Selling the March 7, 2025, $265 Call at $7.38Buying March 7, 2025, $275 Call at $3.21Net Credit: $4.20 per share (or $420 total per contract)

FIGURE 2. RISK CURVE FOR A BEAR CALL VERTICAL. The strategy has a max reward of $420 and max risk of $580.Image source: OptionsPlay Strategy Center at StockCharts.com. For educational purposes.

Trade Details

Maximum Potential Reward: $420Maximum Potential Risk: $580Breakeven Point: $269.20Probability of Profit: 64.70% (if LOW closes below $269.20 by March 7, 2025)

 If LOW remains below the $269.20 breakeven level at expiration, this strategy will be profitable. It’s a high probability of success strategy to express a bearish view with defined risk.

Unlock Real-Time Trade Ideas with OptionsPlay Strategy Center

 This bearish opportunity in Lowe’s was uncovered in seconds using the OptionsPlay Strategy Center on StockCharts.com. The platform’s Bearish Trend Following scan highlighted LOW as a prime candidate, then automatically structured the optimal options trade, helping you skip hours of research.

FIGURE 3. BEARISH TREND FOLLOWING SCAN FILTERED LOW AS A CANDIDATE FOR A BEAR CALL SPREAD.Image source: OptionsPlay Strategy Center at StockCharts.com. For educational purposes.

By subscribing to the OptionsPlay Strategy Center, you can:

Automate Your Scans. Find high-probability opportunities based on real-time market data and technical signals.Optimize Trade Structures. Receive clear, tailored strategies designed around your market outlook and risk tolerance.Save Time & Energy. No more sifting through countless charts—let the tool do the heavy lifting, delivering insights straight to you.

Don’t let profitable setups pass you by. Subscribe to the OptionsPlay Strategy Center today and harness powerful scanning and strategy-building tools that put you a step ahead in the market every day.

0
FacebookTwitterGoogle +Pinterest
previous post
Not Everything You Dislike Is a “Negative Externality”
next post
What’s the Secret to Crushing the S&P 500?

You may also like

Mish’s Daily: Will the Dow Jones Continue Higher?...

November 29, 2022

GNG TV: Remaining Objective About Trading Rules is...

January 4, 2024

Follow the Smart Money; Technology and Homebuilder Stocks...

October 8, 2023

Plenty of Setups Emerge as Bulls Regain Control

September 2, 2023

How Mega-Cap Names Dominate Through Market Cap

October 16, 2023

Optimizing Your Stock Selection With the Williams True...

September 8, 2023

These Signals Will Improve Your Timing!

March 14, 2024

How to Spot Low-Volatility Stocks That are Ready...

December 10, 2024

Week Ahead: NIFTY Set To Consolidate In A...

February 11, 2024

Year Yield Spike Doesn’t Mean Stock Market Will...

October 4, 2023

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Republican senator claims RFK Jr. mRNA vaccine decision undermines Trump agenda

      August 7, 2025
    • Who is Anita Dunn? The Biden confidante who clashed with Hunter grilled in House autopen probe

      August 7, 2025
    • Case v. Montana Brief: Limit Loopholes to the Fourth Amendment

      August 7, 2025
    • Trump opens $9tn US retirement market to crypto in landmark executive order

      August 7, 2025
    • What Should We Learn from China’s Nuclear Construction Costs?

      August 7, 2025
    • Closing the Primary Care Gap

      August 7, 2025

    Categories

    • Business (8,704)
    • Investing (2,182)
    • Politics (16,333)
    • Stocks (3,228)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved