On August 14, we mentioned that the bears pushed Kroger Co. (NYSE:KR) toward the support of an ascending trendline. We noted that the trendline propped up the price in the past and that it was going to be interesting to see if the support would be able to prevent a move lower. As you can see from the chart below, the price did briefly bounce off the support, but the bears have stepped back in and the price is now testing the strength of the trendline again. Bullish traders will keep KR on their watch lists because the uptrend is still intact and the nearby support offers a favorable risk/reward ratio. The question now becomes whether the price will bounce off the trendline again. Bearish traders will want to watch for several consecutive closes below the support because this would signal a reversal in the trend. It wouldn't be surprising to see the long-term bears set their targets near $21.25 (dotted blue line).
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