This Small Change Could Deliver a Handy-Sized Bounce

[Trading With Larry Benedict]( This Small Change Could Deliver a Handy-Sized Bounce By Larry Benedict, editor, Trading With Larry Benedict Lowe’s (LOW) peaked back in late 2021 after rallying 340% through COVID-19. Then the home improvement giant fell in the first half of 2022, losing over a third of its value by June. Since then, flat sales and narrowing margins have kept a lid on LOW’s share price. Even a promising rally in the middle of this year reversed when momentum faded out. Yet with LOW now down 17% off its 2023 peak and looking oversold, I want to see how things might play out from here… Recommended Link [Elon Musk’s “ChatGPT” Could Soon Mint New Millionaires]( [image]( Elon Musk made $180 million on PayPal when he revolutionized online payment processing. $47 billion on SpaceX, when he revolutionized space exploration. And $94.2 billion on Tesla, when he revolutionized the auto industry. He’s about to shock the world again with his version of ChatGPT. And you could go along for the ride if you make [this one simple move.]( [Click here.]( -- The Rally Fades The left side of the chart below shows LOW’s sideways pattern that carried over from last year. The longer-term 50-day moving average (MA, blue line) generally tracked sideways. And LOW was trading around the same level in May/June this year as in October/November 2022. Lowe’s (LOW) [Image] Source: eSignal As is typical in a sideways pattern, the shorter-term 10-day MA (red line) crossed the 50-day MA multiple times in both directions. In early June, the 10-day MA started accelerating above the 50-day MA, and LOW began to rally. This rally coincided with the relative strength index (RSI) tracking in the upper half of its band (above the green line). But while LOW was making higher highs (upper orange line), the RSI was tracking sideways in overbought territory (lower orange line). This diverging pattern often leads to a reversal. As the chart shows, LOW then locked in its peak at “A” and reversed when the RSI began to retrace lower. Take another look: Lowe’s (LOW) [Image] Source: eSignal LOW briefly (and bearishly) traded in the lower half of its range. The RSI then broke back into its upper band coming into September. Yet it was unable to gain any traction. Instead, the RSI rolled over, locking in LOW’s lower high at “B.” LOW continued to fall with the RSI tracking in its lower band. You can gauge the severity of that fall by the sharp angle when the 10-day MA crossed and accelerated below the 50-day MA. That strong move lower saw LOW recently trading around 17% below its August high. However, it’s also put the RSI into oversold territory (lower gray dashed line)… So what am I looking for? Free Trading Resources Have you checked out Larry's free trading resources on his website? It contains a full trading glossary to help kickstart your trading career – at zero cost to you. Just [click here]( to check it out. Potential Bounce Our mean reversion trading strategy looks for stocks that have overshot in one direction. We aim to profit when they snap back the other way. And that is what I’ll be looking for from here with LOW. If the RSI can form a “V” and rally out of oversold territory, that could set LOW up for a bounce and a potential long trade. The other thing I’ll be keeping a close watch on is our two MAs. As you can see, both are currently tracking lower. If the 10-day MA bottoms out and starts tracking back up toward the 50-day MA, it will add further weight to any up-move. Regards, Larry Benedict Editor, Trading With Larry Benedict Mailbag Our readers at One Ticker Trader are seeing results firsthand: Larry, just getting to know why you made so much dough... through cutting to the chase and simplifying options but being awake to the potential gremlins that stalk the uneducated. Love your work, young man. – Scott F. You can join us, and get ready for your next trade, by heading [here](. And as always, feel free to send questions or comments to feedback@opportunistictrader.com. IN CASE YOU MISSED IT… [Viral Silicon Valley video reveals new AI cash cow]( Did you see this new viral AI video? On camera, one of America’s top tech analysts, Colin Tedards, reveals the next AI cash cow… A groundbreaking technology The Wall Street Journal calls, “the lifeblood of AI.” It has nothing to do with Nvidia or any popular tech company. But firms like Tesla, Microsoft, and OpenAI – the company behind ChatGPT – are buzzing about this groundbreaking technology right now. For early investors, this tiny new device could unlock $200 trillion in AI profits. [Click here to see this viral video before it gets taken down.]( [image]( [The Opportunistic Trader]( The Opportunistic Trader 55 NE 5th Avenue, Delray Beach, FL 33483 [www.opportunistictrader.com]( To ensure our emails continue reaching your inbox, please [add our email address]( to your address book. This editorial email containing advertisements was sent to {EMAIL} because you subscribed to this service. To stop receiving these emails, click [here](. The Opportunistic Trader welcomes your feedback and questions. But please note: The law prohibits us from giving personalized advice. To contact Customer Service, call toll free Domestic/International: 1-888-208-6550, Mon–Fri, 9am–5pm ET, or email us [here](mailto:feedback@opportunistictrader.com). © 2023 Omnia Research, LLC. All rights reserved. Any reproduction, copying, or redistribution of our content, in whole or in part, is prohibited without written permission from Omnia Research, LLC. [Privacy Policy]( | [Terms of Use](