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Kroger (KR) – Get Kroger Company (The) Report stock lately has been struggling and is down about 1.7% on June 16. That’s after it traded about 2% higher in the premarket after the grocery giant reported fiscal-first-quarter earnings results.
In addition, Kroger stock was down 5% at one point on the day, and bulls are now buying the opening dip.
Earnings jumped 21% year over year while revenue grew 11%. Both figures beat estimates. The company also gave a slight boost to its full-year earnings outlook.
So where’s the issue?
Kroger’s guidance for same-store-sales growth (with a midpoint of 2.75%) came up short vs. consensus estimates of 3.2%.
Also noteworthy is that while management boosted the low end of its earnings guidance by 10 cents a share, Kroger beat analysts’ expectations by 15 cents. So maybe the guide isn’t as strong as it seems.
That said, Kroger is posting double-digit growth and is one of the few stocks actually working for the bulls, up about 7% on the year.
Let’s look at the chart.
Trading Kroger Stock
Weekly chart of Kroger stock.
Chart courtesy of TrendSpider.com
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Kroger stock is up on the year, which is a lot more than many stocks can claim in 2022. But it was down in eight of the past nine weeks and is currently down this week, too.
Today’s bounce came from a test of uptrend support (blue line), a support mark that’s been in place since October.
On the plus side, this chart is incredibly straightforward as Kroger shares hover around the $50 mark.
On the downside, it’s got to hold $47 for bullish traders to maintain a long position. Currently the stock is above a very key breakout level, the 61.8% retracement, the 50-week and 200-day moving averages and the weekly VWAP measure.
Below $47 and Kroger stock will be below all these key measures.
Maybe support will come into play at $45 or perhaps it’s lower, but it doesn’t really matter. From a technical perspective, there will be no catalyst to be long if the stock is below $47.
On the upside, $52.50 is a clear level to watch, as that’s where the 10-week and 21-week moving averages are.
Since losing the 10-week in April, this measure has been active resistance for Kroger stock. Regaining that is key for the bull case going forward. If the stock can do that, the $55 level is in play.
Above $55 opens the door back into the low-$60s.
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