Lowe’s Charts Are Stronger Than Home Depot’s

During Monday night’s Mad Money program, Jim Cramer told viewers that homes and remodeling continues to gain strength. That’s why Cramer continued to recommend Home Depot (HD) and Lowe’s Cos. (LOW) , among others.

Let’s check them both out.  

In this daily bar chart of HD, below, we can see that prices have been correcting sideways to lower since late August. Prices have been trading through the cresting 50-day moving average line but a downtrend has yet to materialize. The slower-to-react 200-day moving average line has a positive slope.

 

The On-Balance-Volume (OBV) line has been in a decline from the middle of August and tells us that sellers of HD have been more aggressive.

 

The Moving Average Convergence Divergence (MACD) oscillator just dipped below the zero line for a sell signal but it looks like the MACD oscillator has turned upwards yet again to a fresh buy signal.  

 

 

In this weekly bar chart of HD, below, we can see a mixed picture. Prices are in an uptrend above the rising 40-week moving average line.

 

The weekly OBV line has been in a strong uptrend until September when it turned a little soft.

 

The MACD oscillator has narrowed in recent weeks and could cross to the downside for a take profits sell signal.  

 

 

 

In this daily bar chart of LOW, below, we can see that prices have moved sideways to higher since late August – a stronger performance than the chart of HD above. The 50-day moving average line and the 200-day moving average line both have positive slopes and a bullish golden cross of these indicators can be seen in June.

 

The OBV line turned upwards in March and leveled off in September. The OBV line is not far from making a new high just like prices are close to a new 52-week zenith.

 

The MACD oscillator just crossed to the upside from above the zero line for an outright buy signal. 

 

 

 

In this weekly chart of LOW, below, we can see a stronger picture. Prices have nearly tripled from their March low. Prices are in a strong uptrend above the rising 40-week moving average line.

 

The weekly OBV line shows only a slight dip in September, while the MACD is still bullish but does show a little narrowing of the two moving averages. 

 

 

Bottom line strategy: If I had to choose between going long HD or going long LOW, I would pick LOW as it has the stronger chart and indicator patterns. Traders could go long LOW on a strong close above $170 risking a close below $155 for now. The $190-$200 area is our price target. 

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