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JimVanMeerten (56.35)

Whole Food is high priced



October 07, 2011 – Comments (0) | RELATED TICKERS: WFM


Whole Foods (WFM) has beem both a Wall Street darling and a favorite with the individual investors but I'd like to give you a little note of caution.  With a P/E ratio of 34 in an industry that normally trades a P/E ratio between 10-14 it might be a good time to protect your profits with stop losses.  The graph provided by Barchart of the weekly prices over the past 3 1/2 years shows a solid price growth:

Barchart technical indicators:

1 - 67% Barchart long term technical buy signal

2 - Trend Spotter hold that is turning to a more bullish buy

3 - Trading below its 20 day moving average but still above its 50 and 100 day moving averages

4 - Up 1.91% in the last month

5 - Relative Strength Index 48.98%

6 - Barchart computes a technical support level at 63.43

7 - Recently priced at 66.70 with a 50 day moving average of 63.74

Summary: Whole Foods (WFM) has been a terrific stock and a lot of money has been made by its investors but eventually it's P/E will fall back in line with the rest of the industry.  I'd only make new purchases in major market dips and if you are presently holding shares please put in protective sell stops to  save the profits you've made.

Jim Van Meerten is a Marketocracy Master

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