NEW YORK (TheStreet) -- Natural foods supermarket chain Whole Foods Market (WFM) is set to report third-quarter earnings after the closing bell on Wednesday. These "must see" charts show that investors should be prepared for a positive reaction to earnings, as the stock returns to its glory days of having strong upward trading momentum.
A year ago, on Oct. 28, 2013, Whole Foods set an all-time intraday high at $65.59 and was up 30% year to date in 2013. Then the company released its third-quarter 2013 earnings on Nov. 6. A miss on revenue ended the momentum run for the retailer of Nature's Best foods, and set-up a poor year in 2014.
The stock stair-stepped lower following earnings releases on Feb. 12 and May 6 and the stock traded as low as $36.08 on July 17, down a painful 45% for "buy and hold" investors. The stock has been moving sideways since then.
Analysts expect Whole Foods to report earnings per share of 32 cents after the closing bell on Wednesday. The daily chart below shows the extreme up and down volatility over the last two years. This is followed by the weekly chart, which shows the possibility of a positive post-earnings reaction.
Investors should consider using a "good 'til canceled" limit order to buy weakness to the 50-day simple moving average at $38.28 and add to that position at the July 17 low at $36.08. The upside is to the 200-week simple moving average at $43.02 and to the 200-day simple moving average at $43.44.