Stock Of The Day: Is The Kroger Rally Finally Over?

, Benzinga -  10:04 AM ET 4/7/2025 Investing Ideas

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Shares of The Kroger Co. are lower Monday. This comes after they traded at an all-time high Friday.

‘There's always a bull market somewhere' is an old Wall Street expression. Kroger ( KR ) proves that it’s true. Because of this, our team of technical analysts has made it our Stock of the Day.

Most of the market is in a freefall.  But some of the money coming out of most stocks has been going into some others. Kroger ( KR ) has been one of them.

Many institutional investment managers, such as hedge funds or mutual funds, have mandates regarding how much cash they can hold. If their selling pushes the cash above the mandated level, they must buy other stocks to bring the cash level back down.

But now it looks like Kroger ( KR ) may be about to head lower. The stock staged a classic ‘reversal day' on Friday.

Read Also: How To Trade The Market As Global Trade Tensions Escalate

When the leadership of a market is changing from the bulls to the bears, the price action can cause what technical analysts call ‘reversal patterns' to appear on a chart below. A ‘Reversal Day' is one of them.

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Sometimes, the change of leadership takes place over an extended period of time. This can make reversal patterns like a ‘Head and Shoulders' or a ‘Rounded Top' form on the chart.

Sometimes, the change can take place in one day. The price action can form a reversal day pattern.

On Friday, it looked like Kroger’s recent rally would continue. In the morning, it traded at an all-time high of $71.93. But by the close, the bears overpowered the bulls and lowered the price to around $67.

If the bears have taken over and a downtrend forms, there is a good chance it may end around $62.25. This level was support in March.

Many of the traders and investors who sold shares while Kroger ( KR ) was at this support vowed to buy their shares back when the stock moved higher. But they also vowed to do so only if they could buy them for the same price they were sold at.

This means if the stock drops back to around $62.25, they will place buy orders. If there are enough of them, it will create support at the level again.

Read Next:

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Image: Shutterstock

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