A clear way to trade Fairway
Grocery stocks gathered some strength towards the end of 2014, but as the holidays ended so did the strength. Many are just stagnating. You might think the better word for a grocery store would be rotting. But that is not the case. These stocks are not falling fast. Some minor pullbacks, or sideways consolidation of the latest move up. The favored term is a 'healthy pause.' But who wants to own a pause?
There is one stock in this space that is showing some sings of a Spring awakening though. Fairway Group ($FWM) has been that younger sibling in the grocery space. Following the others, with a bit of a lag. But the chart below suggests it is ready to come out of the shadows.
Fairway started 2015 with a move higher but then consolidated the move beginning in mid February. The difference between it and Whole Foods ($WFM), The Fresh Market ($TFM) and Natural Grocers by Vitamin Cottage ($NGVC) though is that it is breaking the consolidation to the upside. Time to get on board! The rising RSI in the bullish zone and the MACD crossed up and rising support the breakout continuing.
The break of the channel targets a Measured Move higher to 8.65. That is a lot of bananas. Using a stop under 6 gives a really good reward to risk ratio going forward. No coupons needed.
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