Wednesday, January 18, 2017

Kroger [KR] 50 Day Breach

Kroger   [KR]

     Kroger is a prominent grocery store chain headquartered in Cincinnati, Ohio. In it's 2016 year, the company lost about -18% off the value of their stock. It was a down year for the company in that respect. Over the last 5 year period, they have gained 184.97% while the S&P gained 72.37%. Not only has it outperformed the market, but it has offered up a consistent dividend in between 1-1.5% yield. It was uncharacteristic for the stock to plunge almost -20% in one year after continual growth and expansion. That doesn't make a whole lot of sense when you pin it up next to them meeting or beating every quarterly estimate for Kroger's 2016 fiscal year. 

     With that being said, that brings me to what I'm seeing on the charts for 2017. Over the last 6 months, the stock has been basically flat. Moving up and down here and there, but ultimately only down -4%. That is in large part thanks to the rally beginning in mid October and into November. Below is the daily chart for KR.

     The negatives before the positives. The candlestick pattern forming right night is a pretty strong looking hammer. If this plays out and stays looking like that, the technical analysis says that it may go lower for the next couple days. Also, the stochastic chart on the bottom is fairly high to the point of almost over bought. 

     In my mind the good out-weigh the bad. The MACD is basically at zero and the black line is about to cross over the red. When that happens it is a bullish indicator and the stock usually trends upward. Example of that can be seen on October 10th. Also, the 50 day normal moving average just barely crossed over the 200 day normal in a bullish manner as well. Some people much rather look at the exponential because it puts more weight on the most recent days, but that one is close to crossing as well. With the cross of the moving averages coming early on in the year, it could be a sign that Kroger could be reversing trend and heading on up. 

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