12631 member @tpaintrader brings an intriguing pair trade setup to our attention tonight, inside our Pelican Room chat.
Both stocks are in the health food, organic market industry.
Sprouts Farmers Market was a successful IPO back on August 1st. Since then, you can see price drift lower on the first chart, of the daily, below. However, the stock showed good signs of life on Wednesday and I would be looking at a move up through $39 as a trigger with broad market strength. Also note that this is a recent IPO so there is nothing wrong with taking a pass on the trade and allowing the chart to develop its own ebb-and-flow over the next few months.
And should the tape weaken, I expect Whole Foods to break below $54.40 and down from the base I have highlighted for you on the second chart. Whole Foods has been an impressive performer since April. However, the sell volume has been picking up of late, and the daily Bollinger Bands are starting to torque lower.
_____________________________________________
_____________________________________________
