Kroger Co. (The) : Breakout strategy
By Etienne Veber
Entry price | Target | Stop-loss | Potential |
---|---|---|---|
$34.67 | $38 | $34.6 | +9.6% |
The fundamental qualities of the group are clearly attractive as evidenced by the upward revisions of earnings per share. The valuation remains low with an attractive P/E ratio at 12.4x for 2014 and 11.3x for 2015.
From a technical viewpoint, prices are well oriented in a bullish trend on different time scales. This positive trend is expected to go toward USD 35.52. The consolidation phase is corresponding to an healthy configuration after a one-year bullish movement.
Therefore, investors could take a long position in The Kroger, on breakout of the USD 35.5 mid-term resistance with an objective at USD 38. A stop loss should be placed under USD 34.7.