Lowe’s Companies, Inc. (NYSE:LOW) has been quite the outperformer so far in 2017. Lowe’s stock is up more than 15.5% so far this year, compared to gains of about 9% for leading competitor Home Depot Inc. (NYSE:HD) and 4.85% for the S&P 500 Index. LOW received a considerable boost following strong fourth-quarter earnings report, but the question is, can the shares maintain this momentum?

Click to Enlarge Technically speaking, Lowe’s stock could be in for a continued period of consolidation, followed by a tentative rally higher heading into the summer home buying season — depending on the strength of the next slate of economic data on consumer sentiment and the housing sector.

Lowe’s stock is currently holding its ground well. LOW has maintained its post-earnings perch north of support at $81 despite the recent Trump-trade correction on Wall Street. What’s more, Lowe’s consolidation into support is helping the shares work off a near-overbought condition that could have resulted in profit-taking and selling pressure if LOW had gotten too overheated.

On the sentiment front, there is room for improvement from the brokerage community. Specifically, Thomson/First Call reports that 19 of the 31 analysts following the shares rate them a “buy” or better. Meanwhile, the 12-month consensus price target rests at a modest $86.26, representing a premium of only about 4.7% to yesterday’s close.

Turning to Lowe’s options, the April put/call open interest ratio indicates plenty of optimism for LOW stock. Following a recent decline in the wake of earnings, this ratio now rests at 0.47, as calls now more than double puts among options set to expire within the next month.

Overall, April implieds are pricing in a potentially move of only about 3% for Lowe’s stock. This places the upper bound at about $85, while the lower bound rests near $80. Both the high and the low correlate with LOW’s trading range since the beginning of March, and while a breakout could be rather significant, it would take some impressive economic data or a broader market correction to send LOW sharply in either direction.

2 Trades for Lowe’s Stock

Put Sell: With LOW currently looking at range-bound trading for the short term, the best way to bank a profit on the shares using options is to sell out-of-the-money premium. Currently, the April $80 put sell has a high probability of finishing out of the money. At last check, this option was bid at 53 cents, or $53 per contract. As usual, you keep the premium as long as Lowe’s stock closes above $80 when April options expire. On the downside, if LOW trades below $80 prior to expiration, you could be assigned 100 shares for each put sold at a cost of $53 per share.

Call Spread: If you’re a bit more bullish on LOW stock, then an April $82.50/$85 bull call spread looks promising. At last check, this spread was offered at 84 cents, or $84 per pair of contracts. Breakeven lies at $82.34, while a maximum profit of $1.66, or $166 per pair of contracts, is possible if LOW stock closes at or above $85 when April options expire.

As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.