To get a real understanding of how Lumber Liquidators Holdings Inc. (NYSE:$LL) is performing, we have to take a look at technical analysis.
Firstly, we can take a look at relative volume measurements. This is useful in identifying investor and trader interest in the stock over the last few months. Currently, the stock has had relatively weak volume. This can indicate that interest in the stock has waned over the past few months.
Lumber Liquidators has moved down -$3.04 over the past month. However, over the last 100 days, the stock sits at 38.84 above the S&P 500. The 36-month beta score for the stock indicates that the stock is much more volatile than the standard, with a volatility score of 35.73%. We can also look at the 20-day ATR as a percentage of the 20-day moving average. That gives us a natural volatility score of 3.5%.
It’s also important to consider the trends and extent of movement of the stock. Though conventional stock wisdom indicates that trends are important to take advantage of, it is equally important to be cautious not to rely too heavily on possible trends.
Moving average analysis is a useful way to examine the broad impact of money flows. A quick way to evaluate if a stock is moving in a bullish trend is to simply compare the 200 and 50-day moving averages. If the latter exceeds the former, it is an indicator that the stock is moving bullishly. The opposite is also true. If the 50-day average is below the 200-day average, the stock is labeled a bearish trend.
In regards to Lumber Liquidators, we see a bullish trend. However, we should also take a look at mean reversion oscillators. Out of the many oscillators, let’s take a look at the popular Relative Strength Index.
The RSI moves from 0 to 100. A score above 75 indicates a stock is overbought and a score below 25 indicates that a stock is oversold. We can compare a stock’s RSI to a Fast Stochastic to confirm a bullish trend. The company currently has a 14 day RSI of 45.17%, while its 20-day Fast Stochastic sits at 25.68%.
Finally, we can take a look at a few key levels, the Fibonacci retracement zone and the primary institutional long-term moving average in particular. Lumber Liquidators currently sits at a critical 38.2% level drawn off the 52-week high of $41.33 sits at $30.90. The stock’s 200-day moving average, which reads $24.94, also faces additional resistances above.
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