I'm very bearish on Lowes. Here's my bear case, a counter bull case, and finally how to trade it.
BEAR CASE
Textbook head and shoulders (source). Volume is increasing from left too right shoulders followed by a huge spike inciting the break of the neckline. This is now retesting the break of the neckline. We've also got some INSANELY negative chalkin money flow (another confirmation of weak price action)
BULLCASE
The H&S could be seen as weak, as we're slanting upwards from L to R (ie. higher lows). The other thing is that the recent 4hr candle has broken the right shoulder downtrend. Consumer Cyclicals are also actually heading higher, but are about to hit an overhead resistance.
HOW TO TRADE IT:
I'm going to enter some mid January 145ish puts with a PT of 135. My stoploss will be if I get a daily close above that purple line (which is the weekly Support/Resistance ) at 157.85.
Today on Nov. 25, the Jan 15 145P traded at 2.90. If I think we're heading to 134. I think this could end up being a pretty decent 3x+ play, plus hopefully some extra theta baby!
Thoughts? What do you think?
BEAR CASE
Textbook head and shoulders (source). Volume is increasing from left too right shoulders followed by a huge spike inciting the break of the neckline. This is now retesting the break of the neckline. We've also got some INSANELY negative chalkin money flow (another confirmation of weak price action)
BULLCASE
The H&S could be seen as weak, as we're slanting upwards from L to R (ie. higher lows). The other thing is that the recent 4hr candle has broken the right shoulder downtrend. Consumer Cyclicals are also actually heading higher, but are about to hit an overhead resistance.
HOW TO TRADE IT:
I'm going to enter some mid January 145ish puts with a PT of 135. My stoploss will be if I get a daily close above that purple line (which is the weekly Support/Resistance ) at 157.85.
Today on Nov. 25, the Jan 15 145P traded at 2.90. If I think we're heading to 134. I think this could end up being a pretty decent 3x+ play, plus hopefully some extra theta baby!
Thoughts? What do you think?