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)

PTMK stock chart

Buy

20-May-05. Pathmark has been on a major upward trajectory since March. In April I jumped on board and took profits in early May. Basically I chicked out because PTMK had come so far so fast and I felt it couldn't last. Well it did. Pathmark is now $1 higher than it was when I sold, and it still looks strong.

  • Price momentum (PPO) — tapering off very slightly, but still has a head of steam
  • Trend (ADX) — increasing slightly again, and buying pressure (+DI) remains well above selling pressure (-DI)
  • Money flow (CMF) — declining slightly, a slightly worrisome sign
  • Relative strength (RSI) — high and essentially stable for almost two months

The spread between the 50-day and 200-day averages is increasing. Earnings season is over, and each new peak sets a new 52-week high.

26-May-05. I added to my position. Money flow (CMF) has ticked up, as has relative strength (RSI) and trend strength (ADX).

2-Jun-05. Once again I was surprised by an earnings announcement (PTMK just released earnings in April). Excluding charges (non-GAAP) PTMK narrowed its loss, but the announcement caused enough confusion to push the price down. When it started to recover, I added shares.

Sell

profit Bottom line
+1%

22-Jun-05. It wasn't supposed to be this way. After Pathmark found an investor to enable them to retire much of their debt and improve their stores, the stock price was supposed to go up. But after setting a new 52-week high, PTMK has been sliding sidewise, and today started drifting down again after starting out going the other direction. Oops!

It could be that PTMK will still go up some more, but I don't have enough wiggle room to make that bet. With so much capital tied up in one stock, I needed to be more confident of a price rise. The chart doesn't give me that: momentum (PPO) is flat; trend (ADX) is flat and buying pressure (+DI) is slipping; money flow (CMF) is weakening; relative strength (RSI) is ticking down.


PTMK 1-year chart