Lamb Weston ($LW) — Lion or Lamb? – July 27, 2022


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I want to look at a random stock today, Lamb Weston Holdings ( NYSE: LW ). I don’t know if they have any lamb or if maybe it’s just some dude named Lamb. It is a packaged food company and a lot of people are buying that stuff now.

And so what happened? The company reported earnings, you can see that big wild move first thing in the morning. And then it oscillated around, but ultimately the buyers came out. There were plenty of shares traded, almost twice the average volume. This is a big old green skyscraper here and that is part of the thing that we look for.

And then the other thing that we look for is a really, really good closing location value. Meaning, that the stock closes in the top end of the range. The best would be right at the intraday highs. So here, the intraday high is 77.39, the close is 77.14. You can kind of see the only reason this thing stopped is that the closing bell rang.

That’s the type of move that I like. It is not up on a percentage basis, it is not up that much. On this chart, it looks awesome, but if you are buying the stock, and I think it is probably one that you can buy, you are buying the stock here, right there, you are buying the stock here and your risk is really just down to here. If the stock falls below today’s intraday low, then it’s a fake out. Again, I will just say it, I doubt it’s a fake-out because this is a pretty good setup, it’s in a pretty good sector.

But you have to just pay attention to the price action. So if the stock were to fall back down here below today’s intraday low, it’s about 4 percent or so, if you are using yesterday’s it’s a little bit more. But basically, you’ve got a 4 percent risk on this trade and you are really looking for a breakthrough of $80.00. The thing that I like is the volume because the volume tells me that there is something there.

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