Five Star Stock Watch: SuperValu

The company: Supervalu, Inc.

Ticker Symbol: SVU

Sector: Services

Industry: Grocery Stores

Supervalu, Inc., together with its subsidiaries, operates as a wholesale distributor to independent retail customers in the United States. It operates in three segments: Retail Food, Save-A-Lot, and Independent Business.

The Retail Food segment operates retail stores that provide groceries and various additional products, including general merchandise, health and beauty care, and pharmacy. The Save-A-Lot segment owns and operates 381 Save-A-Lot grocery stores and licenses an additional 950 stores to independent operators. The Independent Business segment provides wholesale distribution of products to independent retail customers comprising single and multiple grocery store independent operators, regional and national chains, mass merchants, and the military. 

Please take a look at the 1-year chart of Supervalu below with added notations:

After double bottoming at $2.25 back in November and December, SVU has been on a fantastic run.  However, over the last 4 months the stock has been trading in a sideways range. The key to this range is the level of $7 that has been support several times recently and was resistance prior to that. So, $7 is the line in the sand for SVU.

SuperValu isn't set to release quarterly earnings until January 4, 2014.

No matter what your strategy, or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!