Your registered dietitian would tell you it is not a good idea to shop hungry. You wind up buying impulse items that have too much fat, too much salt and too many carbs that all taste great but go immediately to your waistline.
Today, we want to ignore that sound advice and go shopping for three stocks: Action Alerts PLUS holding WhiteWave Foods (WWAV), Hain Celestial (HAIN) and Whole Foods Market (WFM).
In the chart above of WWAV, we can see a sharp selloff in August and September with heavy volume. Contrast the lows in price with the momentum indicator making a higher low.
This difference between the price action and the indicator is called a bullish divergence and tells us the rate of decline in prices has slowed. This tends to foreshadow higher prices.
HAIN shows us the same chart setup seen in WWAV (above). HAIN has lower lows in prices but a higher low from the momentum indicator.
The decline in WFM is a little different as the decline started much earlier, but we are still seeing the same bullish divergence as prices move lower.
The bases for all three are small, but WFM could easily bounce to $40, HAIN to the upper $50s and WWAV to $46/$47.