Butterflies in Your Macaroni and Cheese
- Posted by Greg Harmon
- on February 7th, 2013
Kraft FoodsGroup, $KRFT, is the resulting US focused company from the split of the former Kraft Foods. So they make and distribute that Macaroni and Cheese in the packages, that your kids love. It is great stuff if I say so myself, but I ran across a problem with it today. You see it has Butterflies in it. That is it has a Butterfly in its stock chart. Take a look.
The chart above showing the daily price movement since the split is tracking a bearish Butterfly pattern. The good news in the short run is that it targets a move higher to 48.95 around February 17th, which happens to coincide very well with its earnings release on February 15th before the open. It certainly has some work to do to get there with the recent pullback from a Double Top at 47.59, but the Relative Strength Index (RSI) remains in bullish territory but with a Moving Average Convergence Divergence indicator (MACD) that shows a negative histogram but a signal line that is leveling after a pullback. Still, all of the Simple Moving Averages (SMA) are below it and rising, if only slightly. There is nothing to do in this name right now, but a move over 47.59 releases the Butterfly to its target for an upside play. Keep it on your radar.
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Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
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