An End to the Selling in Safeway?
After trading lower in recent days, grocery store stocks from Kroger (NYSE: KR) to Whole Foods Market (NYSE: WFM) have started to turn back to the upside. And while many of these stocks have already begun to elicit their own measure of attention from the market, other grocery stocks – such as Safeway (NYSE: SWY) – are still in search of suitors.
Pulling back by more than 1% intraday on Wednesday before rallying to cut those losses in half, shares of Safeway Inc. continue to sell-off in the wake of rallying to their highest level since the summer of 2011. The stock has closed lower for three days in a row – four out of the past five – and is now trading in technically oversold territory above the 200-day.
Safeway has been trading above this level for only a few weeks, climbing back into bull market territory in the second half of December. SWY has earned a ratings upgrade to 7 out of 10, putting the stock at the upper end of our “neutral” category. As of Wednesday’s finish, Safeway has a short-term positive edge of just under three quarters of a percent.
The weakness in Safeway comes in the context of a market in which stocks like Kroger are begining to bounce. KR had closed lower for four days in a row heading into Wednesday’s session, and was up half a percent on the day. Even more impressive is the rally in Whole Foods Market, which is up 2% over the past two days after pulling back for four consecutive sessions.
Similar price action is present in retail groceries like The Fresh Market (NYSE: TFM), up more than 3% on Wednesday after a four-day sell-off that took the stock into technically oversold territory. And the correction that took Costco Wholesale Corp (NYSE: COST) lower for three days a week ago has been met with a two-day rally that has put the stock at new, two-week highs. Costco was up more than 1% heading into trading on Thursday.
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David Penn is Editor in Chief of TradingMarkets.com.