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Applied Complexity Analysis: WFMI

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Thx Scotto!

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Note: the following analysis is formulated as an assimilation of Fibonacci, DeMark, Elliott Wave and other technical indicators. It is offered as education and not intended as advice in any way.

At the recent March 9th peak of $106.78, Whole Foods Market (WFMI) may have completed a significant multi-month peak and started a decline that could take it in time to the $72-$52 area. Specifically, our models suggest that WFMI's bounce from its August 13th lows of $73.21 is a terminal pattern that sported both the requisite momentum divergences as well as important Fibonacci relationships at its peak.

The subsequent decline from the all-time peak of $106.78 on March 9th looks impulsive and could be the beginning of the larger decline we anticipate. Though sell-side sentiment toward WFMI is not as extreme as we would like (analyst ratings are 3 buys, 9 holds, and 2 sells), short interest is low relative to previous years' levels. If our models are correct, the analysis suggests that WMFI presents a good risk/reward scenario on a counter-trend bounce peak toward the $102.72 - $103.72 area over the next handful of sessions (not advice).

It is possible that the counter-trend bounce toward Fibonacci resistance has already occurred at the March 24th $102.72 peaks. If so, we expect a rapid decline below $99. If traders do not get a bounce into the $102.72-103.72 area and instead WFMI falls below $99, we would expect further weakness. So net/net: a breakdown appears probable on either a move below $99 or a move into $102.72-103.72 resistance.

Please note: We are now able to offer our proprietary complexity model analysis on both stocks and/or stock indices as a daily service to institutional investors and a select number of individual investors. There are several different services available; each are provided on a monthly subscription basis and cover all U.S. indices and all U.S. stocks. Please contact us for details and rates.

No positions in stocks mentioned.

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