Even Supermarkets Are Going Parabolic in This Bull Run

In mid-July of this year, I wrote the following in this post

We first looked at supermarket player Kroger as a long-term investment idea back on October 1st, 2012, in this blog post. The stock was trading at $23.77, and we surmised that the multi-year symmetrical triangle pattern could easily resolve much higher imminently. Shorter-term timeframes indicated much-improved price action. And the stock and sector, by and large, were castigated as being dead money….

To my eye, the long-term investment thesis remains intact as long as $30 acts as a floor from here on in.

The stock could easily continue to stretch higher yet. And that is why it is prudent to maintain that core position in a long-term portfolio, instead of blasting in and out all at once. However, at this stage even if a blow-off top is going to occur it is prudent to not be at a full-sized position.

Updating the monthly chart, below, it appears we do indeed have a parabolic blow-off move of sorts on our hands.

Even as a long-term investment, I think it is now correct to dramatically “taper” a position here–Take those profits into abnormal strength and reevaluate whenever (if?) reversion to mean sets in.

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