Tuesday, January 4, 2011

Supervalu Approaching The Great Resistance?

(Click the Above to Enlarge)

Yesterday, the market was up by a whopping 0.81% for Dow Jones, however, Supervalu was down by -0.21%. It is a sad day for me as I am heavily invested in Supervalu when it was at $9.16. I was really upset over this as I am expecting Supervalu to outperform the market. Confused and saddened, wasting no time, I decided to use my powerful technical analysis skill to analyze the chart to find out what will happened to Supervalu next.

1st, looking at the overview of the chart, I immediately notice that Supervalu is approaching the great and important resistance at $9.70. In early September, $9.70 is previously a support for this stock. However, it is now an important resistance that Supervalu must break in order for this stock to move up further to the $12 to close the gap.

I also notice that the volume for yesterday was very strong. It is a good sign because it shows that the bull is trying to push the stock higher however, the bear manage to push it back down as resistance closes in. I believe that the bull will try to wrest to get control again today as the yesterday attempt have failed.

As for the MACD indicator, it still shows a positive sign for the stock to go up further.
As for the Stochastic Indicator, it is not a good sign because the blue line is crossing over below the red line and it has approached the overbought level at the upper side of the 80%. Even though it is the earliest sign of indication that this stock is reversing its course, however, it is not confirm and not necessarily materialize until both the MACD and Stochastic combine show the reverse signal.

Today will be a very important day because the continuing upward trend for this stock will depends on this morning movement of Supervalu, if it fail to overcome and break the resistance of $9.70, I am afraid that it will sink immediately and heads toward the 1st support level of $8.8.

I will not be hesitated to sell this stock if I think that this stock fail to break the resistance of $9.70 and move downward thereafter.

Good luck and Happy Trading!

Disclaimer : This is not an investment advisory, and should not be used to make investment decisions. Information in The Market Oracle Blog is often opinionated and should be considered for information purposes only. No stock exchange anywhere has approved or disapproved of the information contained herein. There is no express or implied solicitation to buy or sell securities. The charts provided here are not meant for investment purposes and only serve as technical examples. Don't consider buying or selling any stock without conducting your own due diligence.  

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