Safeway Inc. (NYSE:SWY) Will Break Out Above $28.45 For Much Higher Targets

Denver, CO, 08/16/2013 (Avauncer.com) – Safeway Inc. (NYSE:SWY) (Closed: $26.31, Up: 2.21%) opened in the negative on Thursday but soon recovered all its Intraday losses and broke the highs of last 2 days to make a new weekly high. The volume responded well by getting at 11 million, more than double the average volume of 5 million. The volume is rising in the recent times and the spikes are more frequent nowadays signalling bullish power. The price broke out of an Ascending Triangle yesterday which gives us a target of $31.84 in the coming days. But a much bigger breakout is possible according to the long term chart.

The long term chart shows 4 clear phases – the first one is the bull market of 1994 – 1999, when it rose to $62.44 from $5.75; the second one is the fall of 1999 to $29.31 and the V-shaped recovery to $62.69 by 2000 and creating a Double Top at that level; third, the bear market of 2000 – 2003 when it the low of $16 and lastly, the sideways bear market of 2003 -2013. This sideways range created a form like a bearish Head & Shoulder but the pattern failed. After holding the level of $16 for about a decade, the price broke it in 2012 by a point but it turned out to be a bear trap and price rallied hard to reach $28.42 by April 2013. This high is the most important level and the trigger for a new bull market in the stock. The entire price action from the 2010 top of $27 was contained in a down sloping channel, which was broken in February 2013 and tested again in May & June this year.

The push from that channel and the failed bearish H7S pattern provides an opportunity to break the level $28.42. The investors should buy the stock if it manages to sustain above this level.