This chart is $GO-ing and could squeeze higher – June 16, 2022

by DAN SPY GO 
This is Scott with your Chart of the Day. As you know the S&P ( NYSEARCA: SPY ) is blah. It is still in a pretty strong downtrend, under all the major moving averages and making a new low here today. That’s really all you need to know about the market, the market is continually making lower lows. So until that changes it is probably not a great time to get too aggressive in trading just generally.

Now that said, there are some stocks that are working pretty well. In fact, one was getting a bunch of chatter in the forum over at stockmarketmentor.com and that is GO, Grocery Outlet ( NASDAQ: GO ). If I zoom out here you can see Grocery Outlet ( NASDAQ: GO ) is hitting 52-week highs when the overall market is near the lows.

Now, there are a few dynamics probably in play with this. The fact that everyone still needs toilet paper helps, and food, also helps. But one thing that I noticed when I was doing a scan on MarketSmith, I will bring in the MarketSmith chart, by the way, I have a hidden strength scan, which is a scan that just looks for strong stocks in a weak market and this is the only stock that came up, believe it or not.

One thing that I did notice is the fact that, if you look over here, there is a bunch of short interest, 8.2 days of short interest still on Grocery Outlet ( NASDAQ: GO ). And so, while this move is extended here above the 8-day exponential period moving average, I think that if this makes a new high you are going to see more shorts cover and potentially squeeze this stock up.

So keep an eye on this, I ideally like to buy it closer to the 8-day exponential period moving average or maybe a pullback to the 21-day, where it’s, in recent history, found support. But keep an eye on Grocery Outlet ( NASDAQ: GO ), 8-days of short interest in a bad market. We could see this one squeezing to new highs soon.

Free Chart