Time to Shop for Natural Grocers

• Posted by Greg Harmon
• on January 20th, 2015

Specialty grocery stores have been all the rage with shoppers for several years. Starting with Whole Foods Markets and moving into The Fresh Market their fresh produce and organic growers have left a big mark on the food buying public. Smaller regional grocers are sprouting up around the country now as well.

Despite this popularity their stock prices took a beating in 2014. Many lost over 50% of their value. But that is ending and some of their stocks are starting to rebound again. one that I am watching in Natural Grocers by Vitamin Cottage ($NGVC). The weekly chart below shows the bounce off of a bottom at 16 in October. The rise since is confirming a bearish Shark harmonic that carries a Potential Reversal Zone (PRZ) at 34.50, still a long way above.

This is the most conservative PRZ and there is a second at 40, and were I instead to start the ‘X’ at the March high a 3rd at 41.30 and 4th at 48.40. The Bollinger Bands® show a clear change of character from a falling to a basing to a rising channel. The center line, the 20 week SMA (roughly 100 day SMA), is also running higher now with price above it.

Looking more closely at that bottoming pattern reveals a Cup and Handle pattern on the daily chart. This pattern is triggering as price breaks the Handle higher and carries a target to 41. As it starts to trigger it has support for a run higher from the MACD crossing up and the RSI is bullish and rising as well.

Two timeframes, with two types of technical analysis and several indicators all pointing higher. Perhaps 2015 will be a better year for Natural Grocers.

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