Grocery store stocks aren’t on the top of the list of many traders, but the 35% rally off the summer 2012 lows in The Kroger Co. (KR) caught my interest and led me to look at some of its competitors’ stocks. After looking over the charts of some of these stocks I have come to the conclusion that currently at least they really are a mixed bag when it comes to their chart patterns. But while its difficult to see lots of unaimity from a technical analysis point of view, each of the stocks I looked at do offer interesting opportunities from time to time.
On the chart below I added the following companies: Whole Foods Market Inc (WFM), Fresh Market Inc (TFM), Safeway Inc (SWY) and The Kroger Co. (KR). All four of these stocks lifted off the 2011 lows, but after the first quarter of 2012 divergence set in. Besides the fact that all stocks are higher this year, as far as trading setups look like in the intermediate term there isn’t much resemblance.
Whole Foods Market Inc (WFM), which from a swing trading point of view is the best of breed in my humble opinion, has seen an amazing rally over the past three years and still doesn’t look tired…although its somewhat too early to tell. In the near-term the stock was battling with resistance near $97 and as of this morning post earnings has found its support area near $88 again. A breakout of the range should be tradeable in either direction. On the downside a break of $87 – $88 could lead to a move down to the low $80s
Safeway Inc (SWY) is currently consolidating right at a multi-year down-trend line dating back to 2007. Thus the analysis on this name should be through a somewhat longer-term lens but a solid break past resistance could move this puppy towards $24 in the not too distant future.
The Kroger Co. (KR) with its steep rally off the summer 2012 lows is now approaching levels not seen since 2008 and thus not something that is advisable to chase higher for the time being.
And last but not least, Fresh Market Inc (TFM) is trading in no-man’s land with important support around $44.50 and overhead resistance at the 200 day simple moving average close to the $54 mark.
So there you have it, a mixed bag of groceries with stocks setting up in all directions. As far as my two cents go; play them individually rather than as a group.