LOWES COMPANIES INC

93.36 -0.92 (-0.99%) Sell

LOW is a falling knife, continues to bleed every investor trying to catch it

13 min read

LOWES COMPANIES INC significantly underperformed today. It fell by -0.99% to close at 93.36. During the last week it delivered +4.39% and saw a maximum drawdown of -0.99% before bouncing back.

[Themes containing LOW]

LOW is currently in a bearish trend. The current bearish signal has generated a profit of +15.72% for investors in the last three months.

Trend

LOW has been outperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 20 Jul, 2017 to 19 Sep, 2018. Over the last 2 years 11 months and 10 days, LOW underperformed the SP500 index on 46% days. Which indicates that on days LOW underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months LOW was mostly loss making and delivered on average -0.3% per day. It's best return during this period (of +3.17%) was on Wednesday, 7 Nov, 2018. While it's worst loss in the same period (of -5.66%) was on Tuesday, 20 Nov, 2018. The longest stort-term trend during this period was 9 losing days, which started on 8 Nov, 2018 and ended on 20 Nov, 2018. This bearish trend lost -15.22% of investor capital.

During the last year LOW had 6 profitable months and 6 loss making months. LOW returned profits in fewer months than SP500 index. LOW was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -16.52% compared to -7.28% returned by SP500 index in Oct 2018. LOW had a shorter streak of profitable months than SP500 index. It only went up in 5 straight months during the last year. It is interesting to note that both LOW and SP500 index significantly outperform during months when quarterly/annual results are announced.

Stock market bubbles don't grow out of thin air. They have a solid basis in reality, but reality as distorted by a misconception.
-- George Soros

LOW is currently seeing overall increase in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in LOW's volatility from 17 Sep, 2018 to 12 Dec, 2018. While there was a significant surge in the SP500 index's volatility from 25 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that LOW has negative skewness in it's return distribution. This indicates that investors may need to stay invested through long periods of drawdown before expecting a recovery.

Investors trading in LOW derivatives at this moment can consider 'Covered Call' options strategy to receive better risk-adjusted returns.

SP500 index has more chance of extreme outcomes than LOW. Therefore, SP500 must receive a lower allocation than LOW in your portfolio. SP500 index usually has shorter drawdown period than LOW.

Based on your interest in LOW you may find it interesting to know that EIX, ALLY and GBCI have all performed similar to LOW and qualify as alternative investment candidates that must be evaluated for diversification.

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