WFM Testing Top of Large Basing Pattern

WFM (Whole Foods Market Inc) is too overbought for my comfort level after a very extended, near-vertical rally from the bottom of this 1.5+ year basing pattern to the top of the trading range. As such, my preference for a long entry will either be a breakout above the top of the base IF the stock consolidates here for a while -OR- possibly on a backtest of the pattern from above, if WFM breaks out soon, ideally after a period of consolidation to alleviate the overbought conditions. Daily & weekly charts below.


As I often say, overbought can become much more overbought so it is certainly possible that WFM goes on to break out above the top of this large basing pattern soon & goes on to rally from there. We all have our own trading rules & one of my is not to take long-side breakouts that come on the heels of a very overbought, extended rally as more often than not, those breakouts either fail (prices falling back down into the pattern & moving lower) or go on to backtest & consolidate shortly after the breakout for what is often an extended period of time. As such, this one is on watch as a potential official trade idea but until & unless that happens, I just wanted to pass along this setup for those that might be interested.

Apr 17, 2017 11:29am|Categories: Unofficial Long Ideas|Tags: |2 Comments


  1. stock51 April 17, 2017 12:07 pm at 12:07 pm

    extended, because of a buyout rumor


  2. rsotc April 24, 2017 3:07 pm at 3:07 pm

    WFM breakout occurred last week. Now awaiting a potential backtest for an objective long entry (still TBD… not an official trade setup yet, even if the backtest occurs soon).


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