The Kroger Co. (KR) shares rose more than 7% during Monday's session amid the ongoing stockpiling trends throughout the United States. Many grocery stores have been forced to reduce hours to allow more time for restocking while instituting caps on in-demand items like sanitizer and toilet paper to ensure that people have access to the limited supplies.
UBS analysts say that there's more questions than answers in the retail sector, but they've suggested some retailers that could fare better than others. Along with Kroger, the analyst team believes that Costco Wholesale Corporation (COST), Walmart Inc. (WMT), and Target Corporation (TGT) could be better positioned than other retailers in the space.
Despite Kroger stock's recent gains, most large-cap companies are affected by the overall market that has been trending sharply lower over the past few sessions. The financial impact of stockpiling trends also won't be apparent until the company's next financial report.
From a technical standpoint, the stock rebounded from the 50-day moving average at $28.97 to nearly retest highs made earlier this month. The relative strength index (RSI) rose toward overbought levels with a reading of 60.40, but the moving average convergence divergence (MACD) continues to trend higher after hitting resistance levels.
Traders should watch for a breakout from prior highs of around $33.70 or at least a close above trendline support at around $30.25. If the stock breaks down from these levels, traders could see a move toward lower trendline support at $28.25 or the 200-day moving average at $25.53. A further breakdown could test reaction support at around $24.00.
The author holds no position in the stock(s) mentioned except through passively managed index funds.