Sprouts Farmer’s Market Breaks Out of Trend, But Caution Remains
Sprouts Farmer’s Market ($SFM) Weekly: Sprouts Farmer’s Market has been in a downtrend ever since it came on the market – making lower highs and lower lows, it finally seems to have found some support and bottom at the $18 price level. After retesting this level in March, the stock proceeded to make a strong move up and above the trendline resistance that it has been for so long, extending to about the .618 Fibonacci level before finding resistance there; be that as it may that this happened on the week where $WFM was acquired by $AMZN, it did actually make a new three month high and seemed to be stalling a bit before the big move down on Friday like the rest of the grocers.
And as with some of them like $KR, for example, it did have buying interest and make some of that loss back Monday, as well as part of Friday’s lows, Weekly view still shows weakness, as MACD is looking to roll over to the downside at present course. It may retest the trendline and ride along that downward slope to retest the $18 low (once again), or manage to make a higher low in the current trend and make a bid to head higher past $30 (hence breaking the current lower low, lower high trends, which would be bullish for the stock). But keep in mind that, despite it having breaking out above this downward trendline, that is to no avail should it make its way down to $18 and BREAK BELOW that important support level, as it would be certainly heading to resume the longer term lower lows that it’s been making since its ipo – that would be very bearish as it tries to find another support level in to uncharted levels for the stock. Keep eye on any bullish RSI divergences, or continued positive trends in the RSI, as well as MACD crosses to the upside to see where this stock will turn and head higher if you’re a bull, and the exact opposite for those looking to short the stock.
And as with some of them like $KR, for example, it did have buying interest and make some of that loss back Monday, as well as part of Friday’s lows, Weekly view still shows weakness, as MACD is looking to roll over to the downside at present course. It may retest the trendline and ride along that downward slope to retest the $18 low (once again), or manage to make a higher low in the current trend and make a bid to head higher past $30 (hence breaking the current lower low, lower high trends, which would be bullish for the stock). But keep in mind that, despite it having breaking out above this downward trendline, that is to no avail should it make its way down to $18 and BREAK BELOW that important support level, as it would be certainly heading to resume the longer term lower lows that it’s been making since its ipo – that would be very bearish as it tries to find another support level in to uncharted levels for the stock. Keep eye on any bullish RSI divergences, or continued positive trends in the RSI, as well as MACD crosses to the upside to see where this stock will turn and head higher if you’re a bull, and the exact opposite for those looking to short the stock.