Grocery chain Kroger (KR) is 1.6% lower to trade at $66.42, eyeing its fifth daily drop in six sessions. The equity has struggled since tapping its April 22 record high of $73.63, having already shed 8.3% for the month of May. However, the Kroger stock pullback may be short-lived, as the security nears a historically bullish trendline.
Specifically, per Senior Quantitative Analyst Rocky White, the shares are now within one standard deviation of their 80-day moving average, a trendline that KR has encountered for the first time in at least eight of the last 10 trading days, after spending at least 75% of the last six months above it.
Within these parameters, 11 such signals have occurred in the past three years. KR was higher one month later 64% of the time, averaging a 4% gain. Should this rally reoccur, we could see Kroger stock back near $69.
Analysts are split toward the equity. Heading into today, nine of the 20 in coverage carry a “hold” or worse recommendation. This leaves plenty of room for upgrades, should this bearish sentiment begin to unwind.
Short interest on KR has risen 3.2% during the most recent reporting period. Now, the 35.33 million shares account for 5.8% of the stock’s total available float, which would take nearly five days for short sellers to buy back.
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