October 15, 2010
Shares of Whole Foods Marketing (NASDAQ: WFMI have been trading mostly sideways since reaching 2010 highs at $42.50 back in May. But they have formed a bullish pattern since.
Since May, WFMI has been making lower highs in its rallies and higher lows in its declines. If you draw a line through the rally closing highs and the decline closing lows, you get a pennant pattern. Typically when a stock breaks out of such a pattern it continues in the direction of the break.
Also, stocks usually break in the direction of the previous major trend and in this case that trend was up.
Currently the upper declining trend resistance line is at about $37.50 a share. A decisive close above this level would be a bullish breakout and result in considerably higher highs over coming months.
WFMI closed at $37.06 on Thursday, October 14.
The Fibtimer.com (http://www.fibtimer.com) Stock Timing Strategy does not currently hold a position in Whole Foods Marketing.
Disclosure: The Fibtimer.com (www.fibtimer.com) Stock Timing Strategy does not currently hold a position in Whole Foods Marketing.