Quantum's KR Trading Guide 4/11/25

KR (Kroger Company)

Sentiment
• Analysis: Market sentiment for KR is neutral leaning bullish. Post-close options activity on April 10 shows balanced put/call volume, with slight call dominance at strikes near $69, suggesting cautious optimism. RSI (14) at the April 10 close (estimated ~60 based on recent uptrend to $67.96) indicates momentum without overbought conditions, supporting a potential continuation. Anonymized X chatter highlights speculation on grocery sector stability amid tariff uncertainties, with some noting KR’s domestic focus as a hedge against import risks. A potential liquidity sweep above recent highs ($68.76) could signal institutional buying, setting up a reversal to the upside.

Catalyst: Watch for a sweep above $68.76 triggering bullish momentum, driven by retail investor interest on X.
Tariff Impact - Rating: Minimal.
• Explanation: KR’s exposure to tariffs is limited due to its primarily domestic supply chain and focus on U.S.-sourced goods. While imported specialty products could face cost pressures, these are a small fraction of revenue. No tariff relief or escalation was announced on April 10, so sentiment remains stable. Fundamentals are unaffected, but speculative X posts suggest tariff fears could cap upside unless clarity emerges.

News/Catalysts
• No specific company news on April 10, but sector strength in consumer staples drove modest gains, with KR benefiting from defensive positioning amid broader market volatility. X posts noted KR as a “safe play” in uncertain times.
• Upcoming: CPI Data (Today, April 11): Stronger-than-expected CPI could pressure consumer staples (-1% move) as investors rotate to cyclicals; weaker CPI could boost KR (+2%) as a defensive name.
• Retail Sales (April 15): Robust data may signal consumer strength, lifting KR (+1.5%); weak data could hurt (-1%) due to spending concerns.

Technical Setup
Weekly Chart:
• HVN: $66.50 as support (bullish, price above).
• LVN: $70.00 as resistance (neutral, price below).
• EMA Trend: 8-week > 13-week > 48-week (bullish uptrend).
• RSI (14): ~62 (bullish, above 50).
• MACD: Above signal line (bullish).
• Bollinger Bands: Near upper band (bullish).
• Donchian Channels: Above midline (bullish).
• Williams %R: ~-20 (neutral, not overbought).
• ADR: Expanding (bullish, volatility rising).
• VWAP: Above weekly VWAP at $67.00 (bullish).
• ICT/SMC: Higher highs/lows confirm bullish Market Structure Shift (MSS).

One-Hour Chart:
• Support/Resistance: Support at $67.50 (weekly HVN confluence); resistance at $68.76 (daily high). Stance: bullish above support.
• RSI (14): ~65 (bullish).
• MACD: Above signal (bullish).
• Bollinger Bands: At upper band (neutral, potential pullback).
• Donchian Channels: Above midline (bullish).
• Williams %R: ~-15 (neutral).
• VWAP: Above hourly VWAP at $68.20 (bullish).
• ICT/SMC: Buy-side liquidity above $68.76; Order Block (OB) at $67.50 demand zone; FVG at $68.00–$68.10; OTE (Fib 61.8%) at $68.30; displacement seen in early April 11 rally.

10-Minute Chart:
• Closing Move: Strong rally into April 10 close, holding above $67.96.
• EMA Direction: 8/13/48 EMAs rising (bullish).
• RSI (14): ~60 (neutral).
• MACD: Above zero (bullish).
• VWAP: Above VWAP at $68.30 (bullish).
• ICT/SMC: Liquidity sweep above $68.40 in pre-market; retracement to OTE at $68.30; pin bar forming as entry signal.

Options Data
• GEX: Neutral, slight bullish pinning at $68. Dealers may buy stock to hedge, supporting price at $68–$69. Explanation: Gamma Exposure balances calls/puts, stabilizing price near strikes.
• DEX: Moderate call delta bias (+0.25), indicating bullish pressure. Explanation: Net call buying drives directional momentum.
• IV: Moderate (~22%, near norm), suggesting steady swings. Explanation: Implied Volatility supports consistent options pricing.
• OI: Call-heavy (60% calls at $69 strike), favoring upside momentum. Explanation: Open Interest at $69 signals potential breakout target.
Cem Karsan’s Application:
• Weekly Trading Breakdown: High call OI at $69 (exp. April 18) suggests pinning or breakout potential. Gamma supports stability at $68; vanna indicates dealers buy on IV spikes to 23%, lifting price. Charm accelerates delta near OPEX, favoring $69 calls if in-the-money.
• Strategy: Buy $69 calls at $68.30 (OTE), exit at $69.50, profit $0.50, risk $0.40. Ties to liquidity sweep above $68.76, targeting $69 OB.
• Vanna: Rising IV to 23% could push dealers to buy, lifting KR to $69 (bullish).
• Charm: Near OPEX, $69 calls hold delta if ITM, boosting volatility.

Timeframe Analysis:
• Weekly (exp. April 18): 60% call OI at $69, moderate IV, bullish stance.
• Monthly (exp. May 16): Balanced OI, stable IV, neutral stance.
• 3-Month (exp. July 18): Slight call skew, low IV, bullish outlook.
• Directional Bias: Bullish, driven by call OI, positive GEX, and OTE setup at $68.30.

Sympathy Plays
• Correlated Assets: WMT (+2% if KR rallies), COST (+1.5%).
• Opposite Mover: If KR rallies (defensive), risk-on names like SHOP fade (-1%).

Sector Positioning with RRG
• Sector: Consumer Staples – Food Retail.
• RRG Position: Improving vs. XLP ETF, aligning with bullish sentiment and technicals.

Targets
• Bullish: +3% to $70.50 (next liquidity zone, OB at $70).
• Bearish: -2% to $66.60 (FVG at $66.50).