Shark Bites: Amazon-Whole Foods Deal Has Traders Shopping in Retail Sector

 | Jun 16, 2017 | 12:40 PM EDT
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Stock quotes in this article:

amzn

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wfm

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cost

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wmt

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pi

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hiiq

The Amazon (AMZN) acquisition of Whole Foods (WFM) added some interesting drama to what was looking like a slow day. The indices are still struggling but there were some good bounce trades in the retail sector as traders sorted out the winners and losers in the sector following the surprise news.

Traders in my chatroom focused on buying Costco (COST) and Walmart (WMT) , which are in niches that don't appear to be direct targets like other grocery chains. Most of the stocks in the sector have bounced and are trading near intraday highs.

One speculative play on the AMZN-WFM deal is Impinj (PI) . The company provides technology that allows for items that are placed in a grocery cart to be automatically checked out. This helps eliminate the need for a cashier to ring up sales. Amazon reportedly used this technology in a model grocery store it has designed and the potential for it to be used in WFM seems quite high.

The indices are acting poorly again but breadth is better with about 2,800 gainers to 3,700 decliners. There are 150 new highs to 120 new lows, but there are limited pockets of momentum.

One of my favorites and a Sharkfolio holding, Health Innovations (HIIQ) , is breaking to an all-time high on good volume today. This company offers short-term medical insurance and is still relatively unknown. It had some regulatory problems in the past that held it down, but it looks like that may be behind it.

I added to my index shorts yesterday and am sticking with them for now. I don't see many individual setups of interest, but I'll keep looking.

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