No Small Potatoes, Lamb Weston Stock Gets Thrown Into the Fryer

I bet you didn't know that Lamb Weston Holdings LW is a leading supplier of frozen potato, sweet potato, appetizer and vegetable products. I was not familiar with the name even with two chefs in the family. 

Lamb Weston reported earnings Wednesday morning and they missed top-line and bottom-line estimates. They also initiated a 2025 outlook, warning of a challenging year ahead.

With share prices trading about 28% lower let's not waste any time with the fundamentals and jump to the charts.

In the daily bar chart of LW, below, I can see that the shares were in a downward trend before Wednesday's gap lower opening. Prices have been trading below the declining 50-day moving average line and below the declining 200-day line for the past four months. 

The daily On-Balance-Volume (OBV) line turned weaker in early April. The Moving Average Convergence Divergence (MACD) oscillator is in a bearish alignment below the zero line.

In the weekly Japanese candlestick chart of LW, below, I can see that prices have made a large top formation in the past two years. The height of the pattern gives me a price target in the $55 area. The shares trade below the declining 40-week moving average line. 

The weekly OBV line shows weakness since March as sellers have become more aggressive than buyers. The MACD oscillator is in a bearish move below the zero line.

In this daily Point and Figure chart of LW, below, I can see that the shares reached and exceeded a downside price target in the $66 area.

In this weekly Point and Figure chart of LW, below, I can see that the software is projecting the $49 area.

Bottom-line strategy: Crinkle cut or curly fries? Traders should avoid the long side of LW for now as further declines look likely. Maybe consider rice until a good price low has been made.

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