Morning Report Thursday 24 April 2014
The Supermarkets are booming, do we take money and run?
Woolworths (WOW) has led the big supermarket shares higher over recent days, hitting all-time highs of $38.78, over 11% above 2007 highs. Similarly, Wesfarmers (WES) is trading over 2007 highs. Conversely, Metcash (MTS) is trading almost 50% below 2007 highs – another demonstration of critical quality stock selection. I have been neutral this sector over recent months and have unfortunately missed this latest thrust, but you can never be on all good trades. On a valuation and technical basis, I see it very hard to buy the sector here and would be taking at least part profit if I was long.
Woolworths (WOW) – I could not buy here, I would take part profit over $38 or run stops under $36.80 – chart 1.
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