Sainsbury's

Wednesday, 4th July 2018 10:40 - by Rajan Dhall

The supermarket has been performing well of late and price has broken out if the long standing consolidation area between 220-280p after the ASDA merger deal was announced. The share price is now firmly above the 300p mark and today before the market opens we are at 318p. This morning the Co. have released their first quarter statement where:

·     Total retail sales up 0.8 per cent (excl. fuel) with like-for-like sales up 0.2 per cent (excl. fuel)

·     Grocery sales grew 0.5 per cent with Groceries Online and Convenience up 7.3 per cent and 3.6 per cent respectively

·     General Merchandise sales grew by 1.7% and Clothing sales grew by 0.8%, both outperforming the market

So all is well at the company who recently bought Argos and are soon to merge with ASDA and its clear to see the company are looking to take over the lion's share of the sector. Mike Coupe, Group Chief Executive of J Sainsbury plc, said: "I am pleased with our progress in the quarter. The headline numbers reflect the level of price reductions we have made in key areas like fresh meat, fruit and vegetables since March. Our price position has improved and customers have responded well, resulting in a continuation of the improved volume trend we saw in the second half of last financial year.  Looking forward it seems most areas of the business are moving in the right direction but as markets in the US and Asia were subdued we will have to wait and see how the market reacts.

Looking at the chart now, you can see since the merger was announced price gapped higher to trade around 315p. We now have a new consolidation range between 294 - 327p and I am waiting to see if we get a break on with high volume today. On the downside keep an eye on the previous consolidation top specifically 294 and 280p and the next resistance is the 350p psychological level.

The Writer's views are their own, not a representation of London South East's. No advice is inferred or given. If you require financial advice, please seek an Independent Financial Adviser.