Will Heinz surprise the Street?

Kraft Heinz (KHC) is an iconic American food company, manufacturing many popular brands like Velveeta cheese, Oscar Mayer hot dogs, Maxwell House coffee, Jell-O and Kool-Aid. While they are still famous and popular, they have started to lose their competitive edge in the fast changing world with new generations and new eating habits. Its revenue has been in constant decline in the past 3 years. This dire trend has finally hit its stock prices. After reaching the all time high at $95 early this year, KHC has lost a third of its value and is trading around $75 as of today. It seems KHC has nowhere to go but further down. I do believe KHC has a lot more to go down from the current level in the long run. The question is if a short term miracle may save it for now. I think it is possible from the speculation perspective.




KHC will be reporting earnings on Thu after close. It has just reached its new low for the year and the expectation for it is extremely low obviously. This is often the time when a surprise may strike. If the earnings are just a little bit less bad than expected, it may trigger a revenge bounce, causing a huge short squeeze. We have seen this kind of surprise moves many times this year and there is a reasonable chance we may see it again for KHC. Its momentum indicator MACD seems also to agree with this speculation as it has shown a clear negative divergence on its daily chart. But let me be clear, this is purely a speculation and there is no guarantee whatsoever! KHC may tank further after its earnings. So don't touch it if you cannot lose for the speculation!