OK. I admit. This post is just an excuse to share what I think is a hilarious music video “Whole Foods Parking Lot.” Even if you do not like rap music, I recommend checking it out. It is about suburban angst (well, as suburban as West Los Angeles can get) exploding in the parking lot and shopping aisles of Whole Foods. It is a reminder of the charm of paying high prices for organic food and healthy living. I also heard the lead performer graduated from my high school. So what’s not to like?
The video also reminded me how I thought the throes of the recession would surely kill off expensive, specialty stores like WFM. I thought I was vindicated when WFM hit single digits and 10-year lows. Silly me for not instead looking over the horizon at the opportunity.
Over two years later, WFM has come within 20% of its all-time high after posting 10x gains from the March, 2009 lows. Shorts have all but abandoned this stock: short interest stands at only 3.7% of the float (see Yahoo!Finance statistics).
However, angst may finally be returning to WFM. In April, WFM made an apparent double-top as it began a two-month downtrend. A strong gap up from February has been filled and served as support at and around the June lows. A test of the 200DMA looms large. Friday’s gap up on strong buying volume suggests WFM will retest its downtrend before retesting the 200DMA.
The graph below shows how the 200DMA has strongly supported WFM’s uptrend. This support has rarely been tested during this rally – just twice last year. This strong trend even makes the potential double-top look insignificant! Regardless, a retest of the 200DMA is a big moment – one that will surely fail if the general market continues to weaken.
*All charts created using TeleChart
Be careful out there!
Full disclosure: no positions