Healthy Food is In, How About Healthy Food Stocks?

• Posted by Greg Harmon
• on July 29th, 2013

When you think of healthy food most people think of Whole Foods ($WFM). The chart of that stock looks promising but it is set to report earnings on Wednesday after the market close though. Many do not like to hold stocks through earnings and will avoid it. You can protect the position if you want to with options or wait until after the report to see the reaction. I will be looking at it for the premium service alter in the week. The other thing you can do is to broaden your horizons. Whole Foods is not the only healthy food stock. Two others The Fresh Market ($TFM) and United Foods International ($UNFI) might be better plays in the short run.

The Fresh Market, $TFM

The Fresh Market, $TFM, has been rising off of a bottom in March. It recently went through a ‘W’ consolidation and jumped higher, but is now retesting the top of the ‘W’. The Relative Strength index (RSI) has held the mid line during the pullback and remains bullish while the Moving Average Convergence Divergence indicator (MACD) is not as positive. A turn higher, back over 53.50 could be a catalyst for a long entry, but a fall under 52 sets a target for a Measured Move (MM) lower to 50. This stock does not report earnings until late August.

United Foods International, $UNFI

United Foods International, $UNFI, has run higher in fits and starts from a double bottom at 47ish. The movement since late Ma has been a Harmonic Deep Crab. It achieved the Potential Reversal Zone (PRZ) and is now pulling back in a broadening descending wedge. Or is it a bull flag? The Crab calls for a target lower at the 38.2% Fibonacci level, while the bull flag suggests a MM to 62.50. Whichever it gives first is the one to play. i guess the world is right to think of Whole Foods first. Both of these stocks will be moving but not likely before Whole Foods reports.

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