Whole Foods a Short Term Short Covering Candidate

Whole Foods Market Inc. (WFMI) is a decent short term bounce candidate that could be propelled higher by a round of short covering. With a short interest of 27.16 million shares, or 19.6% of the publicly traded float, yesterday’s Jefferies & Co. initiation of the grocery chain with a “buy” rating was exactly the type of catalyst needed to get the stock moving. According to the AP, analyst Scott Mushkin noted that Whole Foods should beat his $1.09 per share profit estimate for 2009 thanks to fewer new store openings, cost cutting benefits and a Wild Oats acquisition that should become less of a burden, even going as far to say that the company could beat by $.19 a share even without a meaningful economic recovery. Though the stock is down a bit this afternoon by about 2.6% in a broad market selloff, underlying technical support at $18 still stands and the retrace has come on light volume of 2.6 million shares. This looks like a head fake before the stock moves higher.