W.W. Grainger (NYSE:GWW) is expected to report August sales today, making it one of the top stocks to watch on Monday according to MarketWatch.com. The weekly stock chart clearly shows that GWW stock is trending upwards for more than a year, but there are signs that the current uptrend might have lost speed or ended all together. The stock declined 22% in mid-July to August, breaking the most recent support level at $141 and it is trying to reach out for the resistance level at $160. Depending on the sales report, I am expecting a Fail Top formation in the weekly graph and entering a sideways consolidation phase, if not a downtrend to $110 the following months. MACD divergence also points to that direction.
W.W. Grainger is a distributor of maintenance, repair and operating supplies with a 2010 net profit margin of 7.15%. Stock chart analysis show that investors trusted the company in late 2008 when volume peaked to almost 40M shares in October of that year. Comparing to 15M average monthly traded GWW shares in New York Stock Exchange the past 20 or so months, it’s worth noting the fact that September’s monthly trading volume has already hit 19 million GWW shares with 3 more weeks to include!
I’m not looking to trade W.W. Grainger’s stock; at least not before the August sales report comes out!