Is There Life After Amazon for Kroger?

 | Oct 12, 2017 | 10:39 AM EDT
  • Comment
  • Print Print
  • Print
Stock quotes in this article:

kr

Kroger Co. (KR) has been showing a different trading pattern recently. When we last reviewed KR, we liked what we saw, but that positive viewpoint was totally blown out of the water as prices collapsed from $30 to nearly $20 in just a few sessions. Prices recovered for a few weeks into early August and then traded down to $20, where it has tried to stabilize again.

Let's check out our charts and indicators again to see if this new lower price level is a better location for a new base pattern.

In this daily bar chart of KR, above, we can see that prices have held the $20 level and have bounced to the underside of the declining 50-day moving average line. The volume of trading has been heavier in the past two months than most of the rest of the year. Heavier volume at a potential price low can mean that aggressive sellers of KR are meeting aggressive buyers of KR, and prices are holding in a stand-off as shares move from weak hands to strong hands.

The daily On-Balance-Volume (OBV) line has been roughly moving sideways the past two to three months. A rising OBV line would be better, but after the declines seen since November, sideways is not too bad. The momentum readings in August and September show equal lows compared to lower lows in price for a bullish divergence. This bullish divergence could help to set the stage for KR to rally into year-end.

In this weekly bar chart of KR, above, we can see the long decline in the price of KR from above $42 to around $20 now. Prices are below the declining 40-week moving average line. The weekly OBV line is bearish, but the MACD oscillator is close to a bullish crossover from below the zero line. This would be a cover shorts signal for KR.

In this Point and Figure chart of KR, above, we can see a potential upside price target of $24-$25.

Bottom line: KR may need more downside testing and base building in the weeks ahead, but for now the worst may be over.

Columnist Conversations

Quick note: Walmart (WMT) broke the 50 and 100-day moving averages. Hello 200-day at $86 and change?
VIX is only up about 1.15 and is lower than it was at 10 AM ET when the market was only down 8. VIX seems to t...
S&P futures are trading below the 50 DMA @ 2727.40 Our first support level @ 2701 A short-term oversold...
There is some really strong flow here today on the ATVI Mar 75 calls, so I went a bit lower and took less risk...

BEST IDEAS

REAL MONEY'S BEST IDEAS

News Breaks

Powered by
Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.


TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.