This Flooring Stock Could Move Higher

This is a Post from the Symbol Surfing Blog from Tue, Jul 10, 2018.

I was scanning my list of low pe stocks last night.

I saw a few buying opportunities there, but the one that stood out the most to me was Mohawk Industries.

It's P/E Ratio is 4.38. That's pretty low.

Also, MHK has a $16 Billion market cap.

But what do they do?

"In 2015, Mohawk was recognized as the most used, top-brand familiarity, and top-quality rating carpet product by the Builder magazine."

You may have seen their products at Home Depot and Lowe's. By the way, both HD and LOW are near all-time high levels.

So let's look at some technical analysis.

As you can see, the trendline I highlighted shows a long-term uptrend trading range.

More importantly, the stock price has recently bounced off of the bottom of the trading range or support.

Let's look at that closer.

The 1 year chart looks pretty bad.

After climbing the first half of the year to a record high, the stock has dropped significantly after each of the past 2 earnings dates which are the black vertical lines.

The area I highlighted in yellow is what I think could be a bottom as well as a reversal.

It looks like an "inverse head and shoulders" chart pattern

The price has started to move higher through the 50 day moving average, which is also bullish.

All in all, that's why I bought today.

This is a setup that I really like.

I am hoping to make $10 or more on this trade.

Of course, there is the Trade War risk, but I am wondering if that is not already priced in.

The stock has dropped from $280 to $220.

The next earnings date is Wed, Jul 25, 2018.

Let me know in the comments section!

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Tue, Jul 10, 2018 MHK @ $219.07