We last discussed White Wave Foods (WWAV) on Nov. 19, when we commented, "WhiteWave Foods has been moving sideways for two months, and our momentum study suggests that prices should try the upside soon." Like many other stocks we have looked at in recent months, WWAV bottomed in early 2016 and has since seen a number of bullish technical developments.
Take a step back from your computer screen and just get a sense of this daily chart of Action Alerts PLUS holding WWAV, above. Use your eyes and draw an imaginary horizontal line across $42, and you should be connecting a number of highs in late November, March and early May. Got it?
By mid-May, WWAV breaks out over $42, and over the 200-day moving average line, with a sharp increase in volume. Later in May, we have a bullish golden cross of the 50-day and 200-day moving averages.
The On-Balance-Volume (OBV) line shows some slow improvement from April, signaling that buyers of WWAV have become more aggressive, with heavier volume traded on days when WWAV has closed higher.
There are a number of bullish developments to point out on this weekly chart of WWAV, above. In March and April, prices stalled at the underside of the average line, but in May, prices broke out over this long-term average.
The OBV line on a weekly timeframe has been moving higher to confirm the price strength. The Moving Average Convergence Divergence (MACD) oscillator has moved above the zero line for an outright, go-long buy signal.
Is there resistance at the old high? Sure. WWAV topped in the low $50s this past July, but prices were only there about five to six weeks, so this is not likely to be a significant resistance zone. (The longer prices are in a support or resistance area, the more important it becomes.)
Bottom line: Prices might dip back towards $45 again, as the recent gains need to be "digested," but traders should anticipate a test of the 52-week highs around $52 to $53.