Opportunity From Your Grocer, Naturally
Dragonfly Capital | Apr 02, 2014 02:44PM ET
Natural Grocers by Vitamin Cottage (NGVC) went public in July 2012 and still is only followed by a few analysts. They do like the stock, but to me it is more important that it is not widely followed. The chart is what speaks to me. The weekly timeframe chart below shows it consolidated in a tight range following the IPO between 18 and 24.25 for nearly 10 months before a run higher to 43. From there it was consolidating in an ascending triangle from August 2013 until it broke higher in the middle of March. The price is retesting that breakout level now and holding.
This presents a trade opportunity. The target on the ascending triangle break takes the stock to 52.60 or about $10 higher, but the Measured Move from the run into the triangle targets 60 above that. An entry here against a stop at the 20 week (100 day) Simple Moving Average offers a nice reward to risk ratio.
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