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 Bill Ackman's Pershing Square has taken a $1 billion size position in home improvement Lowe's in recently months.

It has been a difficult few years for Bill and his investors. The hedge fund's returns fell 4% in 2017, dropped 13.5% in 2016 and declined 20.5% in 2015, but Bill thinks Lowe’s has opportunities to improve its supply chain to serve customers better and enhance the customer experience through strategic brands and differentiated in-store experiences.

Ackman also supports the new CEO Marvin Ellison.  Marvin Ellison formerly of JCPenney (JCP) was hired earlier this year.  

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Ellison spent more than 12 years at Home Depot, where he was executive vice president of U.S. stores from 2008 to 2014. During that time period he oversaw 2,000 and $65 billion in annual sales volume.

However, the housing market faces some challenges moving forward.  Just take a look at the SPDR S&P Homebuilders ETF (XHB).  Price broke the monthly trend line April and the chart suggest price has room to drop down to the monthly demand zone at $29. 

![](https://cdn.steemitimages.com/DQmVoDm37NZqwRgW6Z4p3sRk3TPSbBfdrdcR1hTyG3YkGUX/image.png)

Mortgage rates have risen as well, though they are still low by historic standards, but the new tax law limits all state and local income taxes and property taxes that can be deducted to $10,000.  Lastly, the consumer confidence data for July shows people who plan to buy a home in the next six months is at the lowest level since June 2016.

What we are experiencing is pressure on both sides of the housing market. Buyers are getting squeezed by rising mortgage rates and housing prices are climbing almost double income wages.

The outlook is not good, and that means considerable pressures for Lowe’s going forward.  Lowe's made an all time high of $109 in Jan. before dropping and pulling back from the monthly demand at $79.  I personally think price will be range bound for several months, but I think there is more downside risk due to the RSI trending downwards.

![](https://cdn.steemitimages.com/DQmTM3P7AzwWmbvdMSLVXLiuJkz9e4jcTmc57em5MLY39eT/image.png)


This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.

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