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September 29 Chart of the Day - Kroger

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Kroger (KR) is one of Warren Buffets top 30 holdings and as such the stock garners a lot of attention from traders, investors, and the media.

The Cincinnati based grocery store has a trailing four-quarter earnings surprise of 6.8%, on average. Shares of KR have gained 1.6% in the past year.

From a price action technical analysis perspective, on the monthly chart we see a lot of sideways price movement for the past 18 months.

On the weekly chart we can see price mingling with a "change control zone" during that time frame.

Change control zones are one of the five price action tools we teach when charting anything.  By definition, they are an area that represents where neither the bulls nor bears are in charge.  Price can slash though the zone with seemingly reckless abandon, price can respect the top or bottom from outside it or within it.  Or, price can trade aimlessly sideways within it.  When price breaks away from the zone it can often get drawn back to it like a magnet. And in this case we see all of the above are true.

We can also see that price has been making a series of lower highs and higher lows (a wedge).

This structure can provide tradable opportunities in both directions while price is coiling and deciding what it wants to do.

So what's next? 

We don't make predictions...

Nobody knows for sure but using these 5 price action tools traders and investors can develop levels of interest in both directions.

  1. Support/Resistance
  2. Trend
  3. Fibonacci 
  4. Supply/Demand Zones,
  5. Change Control Zones

Take a look at the charts and let us know what you think.  

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