Sainsbury‘s sales up - Continuation of the rebound expected

Market chart showing uptrend
Sainsbury, the supermarkets chain, reported an 8.2% increase in like-for-like sales for its first quarter ended June 27, boosted by purchases made during the UK containment period. 
The company said: “Our base case scenario continues to underpin an expectation of broadly unchanged Group underlying profit before tax for the full year."

From a technical perspective, the stock price escaped from a consolidation phase started at the end of 2019. The V-bottom pattern formed in March calls for a recovery. The 20/50DMAs have validated a bullish cross. In addition, the daily Relative Strength Index (RSI, 14) just pushed above a key declining trend line calling for a reversal up trend. First support is set at 201.8p. Readers may want to consider the potential for Long positions above the support at 201.8 (20DMA) with 225p and 237p as bullish targets. Alternatively, a break below 201.8 would call for a consolidation move towards 191.3p and 181p.  

Source: GAIN Capital, TradingView


Related tags: Coronavirus Equities

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