SUPERVALU (SVU) is not likely to be a super buy despite its low price tag. Looking at the charts and indicators this morning, we can see that SVU has been trending lower over the past year and is down significantly from its early 2015 zenith, but a low price doesn't necessarily make this stock more desirable.
In this updated daily bar chart of SVU, below, we can see a pattern of lower lows and lower highs for much of the past twelve months, but there is a new up-move from the March lows. SVU has rallied above the declining 50-day moving average line, but is still below the declining 200-day moving average line.
The pace of volume doesn't look like it increased since March, and the daily On-Balance-Volume (OBV) line shows only a slight improvement. The lower price lows since January show a bullish divergence vs. the higher momentum lows, telling us that prices slowed into the March low.
In this weekly chart of SVU, above, we can see a much longer decline in the stock. Prices are below the declining 40-week moving average line. The weekly OBV line has been declining since early 2015, and suggests significant liquidation and selling. The MACD oscillator has been below the zero line for the past two years (bearish) but could be signaling a cover-shorts buy signal.
Bottom line: After the significant decline from the 2015 peak, SVU needs a lot more base building before I am interested in approaching the long side.