Whole Foods (WFM) has spent the last couple of months forming a pretty impressive bottoming pattern. Today the stock was up 2.02% and posted its first close above the 50-day simple moving average since March:
WFM looks like an attractive long setup for the following reasons:
- Clear bullish momentum divergence at the low earlier this month (RSI-14 made a higher low as price made a lower low on light volume)
- Breakout above previous resistance near $41.50
- First daily close above 50-day SMA in more than four months
- 4 accumulation days and 0 distribution days in the last 8 trading sessions offers a strong signal of a character change in the stock
- Open gap from May all the way up at $47.56 with a volume-by-price ‘vacuum’ between $43 and $47
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