Whole Foods Market (WFM) was in a nice uptrend until the end of 2013.
GAP REVIEW
On November 7, 2013, WFM gapped down and broke the uptrend line that it held for half the year of 2013. The gap down was more than $6.00 on downside action. This gap down put the stock on short watch because the uptrend was broken and it was on the hunt for solid demand. WFM gapped down on 5/7/2014 putting all longs in a lot of pain. The gap down was under a previous demand point at $40.00 which has now become a supply and key focus for our swing trade.
KEY LEVEL
Supply exists into $40.00 from the gap day and has a key demand level at $32.00.
THE TRADE
Short a break under $38.25, stop over $40.10 and target into $32.00.
