Kroger (KR) shares have been sharply volatile on Thursday.
After the grocery giant rallied in five straight trading sessions, the shares opened about 6% lower. They were down 7.7% at today’s low and at last check they were off 3.4%.
The decline came after the company reported earnings before the open.
Earnings of 99 cents a share beat analysts’ expectations by 9 cents. Revenue grew 5.4% to $34.82 billion but missed expectations by $70 million.
Overall, the headline numbers were solid, particularly as management affirmed the company’s full-year earnings outlook and gave a slight boost to its outlook for adjusted free cash flow.
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It’s been a tough stretch for many retail stocks, as Kroger, Target (TGT) and others have struggled for upside traction. Let’s look at the post-earnings dip in Kroger.
Trading Kroger Stock After Earnings Dip
Chart courtesy of TrendSpider.com
Kroger stock faded hard from the $50 area but bounced nicely ahead of the earnings report. The shares opened Thursday’s session right near the previous June low at $44.43 and dipped.
Buyers stepped in at uptrend support (blue line) and regained the $44.50 area. The dip was bought, but the chart still reflects some technical damage.
If Kroger shares continue higher, I want to see how they handle the $46.70 to $47 area. This zone marks the 200-day moving average, the 50% retracement and the gap-fill from this morning’s dip.
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If the stock climbs that high, the bulls will need to see whether this area is resistance or whether the stock can regain the level.
If it pushes through, the $48 area could be in play next. That area is the 61.8% retracement and the 50-day moving average.
Ultimately, the bulls are looking for a return to $50, which has been stiff resistance.
On the downside, the bulls can navigate against today’s low near $43.50. A break or close below this mark could usher in a move down to the $42s.
From here, see that Kroger stock holds $43.50 on the downside and see how it handles a potential rally to the $46.70 to $47 zone.
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