Pathmark (PTMK)

Company

"Pathmark is one of the nation's leading supermarket retailers located in the densely populated New York/New Jersey/Philadelphia corridor. Currently operating 142 stores in four states (New Jersey, New York, Pennsylvania and Delaware), Pathmark supermarkets are large (average 53,000 sq. ft.) and productive ($738 per selling sq. ft.), relative to the market and national average." (company website)

Buy

21-Apr-05. Pathmark's downtrend was reversed in March (see sidebar) when it climbed to the $6 level. The 50- and 200-day moving averages have since turned up. The 50-day average is now crossing above the 200-day average, which usually stimulates additional buying. Price momentum (PPO), money flow (CMF), and trend strength (ADX) are all rising smartly. What's a little worrisome is that PTMK is a tad overbought (StochRSI). On the other hand, when it left the overbought area last week, it did not go all the way to the other extreme. That should be a good sign.

26-Apr-05. I added to my position in Pathmark. Price momentum continues to grow (PPO). The trend (ADX) is still strong, and money flow (CMF) has become strongly positive. PTMK is now trading above the highs of last summer (see sidebar).

Sell

3-May-05. After I added to my position, PTMK took two giant steps backward. Although it has retraced those giant steps, I sense that PTMK is running out of steam. Buying pressure (+DI) declined over the past month. Price momentum (PPO) has leveled off. Relative strength (RSI) has been pretty stable, but the more sensitive stochastic RSI (StochRSI) has made lower peaks and lows since I first bought. I decided to sell, taking profit on the initial position and breaking even on the additional shares.

There could still be a breakthrough above $8.00, but I have a feeling that PTMK may pull back closer to the 50-day moving average before making that move. It is still lower than the year-ago price (see sidebar), so there is headroom. I'll have to keep a sharp eye open in case a breakout comes before I think it will.