Whole Foods Market, Inc. (WFM) is looking very interesting as a trading opportunity right now. The technical setup offers the best window into what traders can expect whether they are bullish on the play or bearish. We’re therefore exploring these deeper technical numbers with a view to helping traders make better decisions on the current trading prospects of WFM. Before we get into the numbers let’s take a look at the importance of these numbers that help to make up the technical chart. The technical charts are, when used properly at least, great vehicles for profit. When used in the way they should, traders are able to roar along as they pick and choose the stocks they want to trade.
WFM’s position, when dissected using the very handy technical charting tool we’ve championed above, now looks very interesting. This position is opened up first by the stock’s current day’s high $37.04 and the accompanying day’s low $35.97. As things stand, the current day’s high means the stock is positioned negatively when matched against the prevailing 52-week high of $38.29 set by WFM on 09/14/16. Given the range, and in particular the position of the stock’s low, we can make the assessment that the day’s low represents a 32.96% since 05/11/17. As a trader you can take this to mean something positive as it relates to WFM latent upside potential and the opportunities, or not, that it provides for active traders. It’s not just traders who are taking a keen look at the stock, either. In the weeks and days of data amassed for the stock, a more open display of analysts. From their perspective, the stock has presented a compelling picture via data. This data has created a $34.05 for WFM. As it stands, this target price is above the biggest gains set by the stock in recent times. Other important data is starting to inform the way analysts and traders see the stock. WFM beta is currently 0.90. Traders that use the beta metric in their trading assessments of stocks know that the current beta for WFM is less than 1, and as such, gives clear directional bearing for upside. The current beta, as assessed below or above 1, suggests that WFM is theoretically less volatile than the composite sector to which it belongs. At this stage you should start to see what is developing for the stock. Let’s move more inland; these metrics only scratch the edges
When data points of different varieties come together, the results can be truly spectacular. We are therefore going to use the next section to flesh out a stronger, more compelling picture for WFM. Two of the most important technical indicators used by savvy traders are the Relative strength indicator (RSI) and Stochastic – both offer a deeper glimpse into the soul of the stock as it were. The present reading for WFM 14-day RSI is 61.26%. What does this mean in real terms? A RSI reading at that level suggests that WFM is neutral, suggesting that the stock is relatively stable and may possibly stay in situ, moving neither up or down in any meaningful or dramatic way. The stochastic reading is a sort of tag team partner for RSI. Usually they speak the same language in terms of telegraphing upside. For WFM, the stochastic reading of 65.44% suggests that the stock is neither overbought nor oversold at prevailing levels. WFM and its upside, of course, can be judged by tacking on even more salient technical data points. We are thinking here about the always-used statistical moving averages – namely the 50 and 200 SMAs. WFM, on the strength of its moving averages, appears to present a sentiment worthy of being called bullish. And as go the sentiment around the SMAs, so goes the upside potential of the stock. In this case the sentiments appear to be positive.
The good thing about using rich technical indicators is that there are really no ends to how you can mix and match. We’ve fixed a few above; let’s now take a look at matching them with another set. This should be the sail fully hoisted on the mast. WFM’s +2.32 has now created a much more confident set of data upon which traders can rely. This reliance is so pronounced that we can make a judgment that overall sentiment is now positive. This is hardly surprising for WFM because further analysis reveals that the stock has actually outperformed the S&P 500 by 5.24. As a result of this performance the stock is now offering lower volatility levels when juxtaposed with similar stocks in its native sector. Based on the overall readings, historical volatility has placed WFM in the front row for many traders. Again, this is hardly a shocker given that historical volatility for WFM is 18.29%. WFM is no slouch on the measure of the Average True Range, either. ATR, as you know, simply cannot be ignored in assessing a stock and WFM offers a very clear reading with an ATR reading of 2.19. WFM’s upside is now fully disclosed. What do you plan to do about it? If you are smart you’ll dig into numbers once again and then make your decision count. Good luck.
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