SuperValu (SVU) has improved the past six to eight weeks. SVU is above the rising 50-day moving average line but still below the declining 200-day moving average line. Buyers have become more aggressive and the Moving Average Convergence Divergence (MACD) oscillator is above the zero line.
These are signs of a short-term turnaround but further strength will get SVU to close above the declining 40-week moving average line. A rally has to start somewhere and this might be that point in time. Let's take some time to read the labels on the charts just as we have learned to read the ingredients.
In this daily chart of SVU, above, we can see a downtrend the past 12 months. Rallies above the declining 200-day moving average line have not lasted long and the selloffs have continued. Over the past few weeks the pattern and indicators have shifted for the better. Prices are in a short-term uptrend from the March low. As noted earlier we saw SVU close above the 50-day moving average line and the slope of the line is now positive.
The daily On-Balance-Volume line declined in January and February but it has since turned upward. The trend-following MACD oscillator gave a cover shorts buy signal in February and another one in March. In April the MACD oscillator moved above the zero line for an outright go long signal.
In this weekly close of SVU, above, we can see that the declining 40-week moving average line has become resistance the past few months. With the OBV line rising on a weekly basis now and a cover shorts buy signal from the MACD oscillator on a weekly timeframe I think SVU now has the power to close above the 40-week line.
In this Point and Figure chart of SVU, above, we can see that a rally to $4.24 will be a minor upside breakout.
Bottom line: If you don't mind dealing with a stock below $5.00 I would look at SVU. You could buy it here and risk below $3.75 or buy it on a close above $4.50 and then risk a close below $4.00.