Chart of the Week: Sprouts Family Markets
Hey good morning everybody. Happy Wednesday. It’s time for our chart of the week. And there’s not a lot of bullish looking charts out there these days, especially with the markets coming back down pretty sharply over the last few days. But we’re gonna take a look at a couple of names – actually one name in particular that has been on a nice run for the past couple of years – a stock that I actually own from back in 2020 that is maybe giving a nice opportunity to look at it and buy the stock.
So it’s called Sprouts Family Markets.
Now, we’re gonna look at this chart from some different angles. And you’re gonna see some bullish characteristics. You’re also gonna see a bearish pattern created on this stock right here. But I think that over time this stock’s going to provide a nice opportunity to get long.
So this is Sprouts Family Markets; symbol is SFM.
And we can see from the bottom left-hand side of the chart that the stock has been making a nice series of higher highs and higher lows. It did run into a little bit of trouble in December. It pulled back quite sharply – about a good 15% over that particular period. But when the new year started, the stock took off again and reached up to all-time highs – $180/share.
When earnings came out in February, the stock came down hard, and you can see that that gap is still open. And it made a series of lower highs. You can see that over here.
But the stock had gone sharply higher and was well above some of the relevant moving averages over this past year, year and a half – and I think that is going to act like a magnet – those moving averages – especially that 50 day moving average, which it pulled back from on Monday, April 7 and closed right at it at the end of the day.
If we get a move above this $160 level, which is above this downtrend line here, that’s gonna be a game changer. We’re gonna get a move back up towards closing that gap at about $170.
Volume trends have been real strong over the past six weeks, and you can see that here in this box over here – mostly down. But we do have a good strong money flow. Money flow has been positive even as the stock has come down. It’s loosened up a little bit of course.
Also we want to take a look at the on-balance volume, which is over here. Even though the stock has corrected over the past 6 1/2 weeks, we still see good strong on-balance volume, which tells you that there’s been more volume coming in than going out, even though we’ve had some pretty negative prints on the absolute basis for volume.
MACD is still on a buy signal, which came in on this crossover here in the middle of March.
Relative strength really not showing us too much, but we do have the price bars still trying to hang in there. And again, if you take a longer term approach for Sprouts Family Markets, you’ll see still a series of higher lows and higher highs, which is an uptrend for the stock.
I think if we get above this $155 – 158 level over the next couple of days, you may see a nice move up for Sprouts Family Markets. It’s moved a lot. I bought it back in 2020 during the pandemic at about $28 – 29. It’s had a huge run over the past five years.
So take a look at Sprouts Family Markets when you get a chance; SFM is the symbol.
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