What supermarket stock is the big winner as sales surge?

Kantar data highlights surge in Supermarket sales, but which names could be boosted by the prospect of further lockdowns?

Supermarkets boosted by pandemic shift in habits

The latest Kantar data has provided a fresh look at the supermarket sector, with many of the names outperforming the wider market on a day of declines. The end of the ‘Eat Out to Help Out’ scheme brought an end to the boom in restaurant use, with September seeing a rise in retail spending according to the BRC report released overnight.

Kantar calculated that growth in business as amounting to a 10.6% year-on-year (YoY) rise in grocery sales in the four weeks to 4 October.

With coronavirus lockdown measures taking hold is the north, we are seeing tentative signs of stockpiling. Also, with a 10pm curfew on pubs, bars and restaurants, supermarkets gained an additional £261 million on alcohol sales alone in September compared to 2019. However, supermarket trips remain well below the peak seen during the pre-lockdown period in March.

From a firm-specific level, Kantar also provided a view of exactly who has been performing particularly well over the 12 weeks to 4 October.

Ocado share price: where next?

Perhaps unsurprisingly, the rise on online trade (76% YoY) has seen Ocado YoY sales rise a whopping 41.9% over the 12 weeks to 4 October. Shareholders have certainly benefitted from this shift online, with the stock up 89% year-to-date.

However, the pullback we have seen this month could provide a buying opportunity, with price falling back into a deep retracement. A break below the £22.61 support zone would negate this ongoing uptrend, but bullish positions are favoured until that breakdown occurs.

Morrisons share price: where next?

Kantar data showed a 11.5% rise in year-on-year sales for Morrisons over the 12 weeks to 4 October. This comes after a period of weakness that sent the stock back into the 61.8% Fibonacci support level at £1.69.

With the price turning higher, there is a potential we could start to see the stock turn back towards the £1.97-£1.99 zone of resistance respected in the second half of 2019 and more recently last month. To the upside, we would want to see a break through the £1.79 resistance level to signal that potential push back towards the £2.00 region.

Tesco share price: where next?

Tesco sales for that same 12-month period was slightly lower at 9.2% according to Kanter. However, the uptrend seen throughout the past five years does highlight the potential for a bullish resurgence from here.

The monthly chart highlights that bullish trend, with an ascending trendline providing us with a fresh buy signal for the stock. That being said, with a descending trendline coming into play to bring a wider triangle formation, we do need to see a breakout in the near future.

Sainsbury’s share price: where next?

Sainsbury's growth fell a little behind its peers, with a 6.8% rise in YoY sales for the 12 months to 4 October. Nevertheless, we have seen the stock rise over the course of the past month, bringing price back into trendline resistance. Unfortunately, that descending trendline does highlight the bearish trend in play here.

A break up through the £2.16 resistance level would bring about a fresh bullish signal, but the stock remains at risk of further downside until we see a bullish break through trendline and horizonal resistance

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