From the low of $13, Lowe’s Cos. Inc. rallied to $28.54 (A-B) and then settled in a large “W” formation during 2010-11 (dashed lines). The rise to $32.29 (C) produced an overbought condition, which was corrected recently by a return to its rising 40-week moving average (D) and to the neckline of the “W” pattern (dotted line). This pullback should provide an excellent entry point in view of higher targets. Only a decline below about $25 would be negative. Point & Figure measurements provide targets of $34 and $39. The “W” formation (dashed lines) supports higher targets.
Monica Rizk is the senior technical analyst for Phases & Cycles Inc. (www.phases-cycles.com). Ron Meisels is a contributor to the www.NA-marketletter.com website and Tweets at @Ronsbriefs. They may hold shares in companies profiled. Please see the site for a glossary.
Chart source: www.decisionplus.com