LOW – Lowe’s Cos.

Lowe's Cos. (8/25/15) Short-term (Negative) : Intermediate Term (Neutral) : Long-term (Positive) After an earnings disappointment Lowe’s Cos. LOW, fell nearly 6% to challenge its 200-day moving average. It is early, but we would were looking for a bounce and then a test. It did not fill that gap from 80.81, but entered the gap zone to absorb some of the overhead. We are now setting up for the "test" of this breakdown. The May low at 74.56 would have to be considered a stop on the "falling knife". Trading below that level increases the risk to 70. The initial resistance is 81.81. We would need to see a new pattern develop or a move above 82.81 to ignite the upside again. Caution is warranted. Notice that the 200-day moving average is flattening out just above the 74.56 low. Therefore, a breakdown would violate both levels of support. Until we see a break, we are at the low end of a "neutral" reading. Support below 70 is decent, although the outside risk is to 67. That is not our expectation. This is a decent sector, and if we continue to see a positive backdrop in the sector, this weakness could prove to be an opportunity. At this point, it is a "wait and see". low