• Chewy (CHWY) shows strong technical momentum, with a 100% “Buy” signal via Barchart.
• Shares are up 110% over the past year.
• Fundamentals support this powerful trend. Chewy has multiple “Strong Buy” ratings and a bullish outlook. 

Today’s Featured Stock:

Valued at $19.6 billion, Chewy (CHWY) operates as an online pet retailer. The company offers pet products which include dry and wet food, toys, treats, and vitamins and supplements. Chewy also operates a pharmacy for pet prescriptions.  

What I’m Watching:

I found today’s Chart of the Day by using Barchart’s powerful screening functions. I sorted for stocks with the highest technical buy signals, superior current momentum in both strength and direction, and a Trend Seeker “buy” signal. I then used Barchart’s Flipcharts feature to review the charts for consistent price appreciation. CHWY checks those boxes. Since the Trend Seeker signaled a buy on April 22, the stock has gained 31.26%.

CHWY Price vs. Daily Moving Averages:

Barchart Technical Indicators for Chewy:

Editor’s Note: The technical indicators below are updated live during the session every 20 minutes and can therefore change each day as the market fluctuates. The indicator numbers shown below therefore may not match what you see live on the Barchart.com website when you read this report. These technical indicators form the Barchart Opinion on a particular stock.

Chewy shares hit a new 52-week high on Thursday, June 5, touching $48.23 in intraday trading. Shares closed just 1.5% below the new high. 

• Chewy has a 100% technical “Buy” signal.
• The stock closed at $47.49 on June 5, above its 50-day moving average of $38.23.
• CHWY has a Weighted Alpha of +113.66.
• The stock has gained 112.69% over the past year.
• CHWY has its Trend Seeker “Buy” signal intact.
• Chewy is trading above its 20, 50 and 100-day moving averages.
• The stock has made 17 new highs and gained 25.6% in the last month.
• Relative Strength Index is at 80.15%.
• The technical support level is $46.10.

Follow the Fundamentals:

• $19.6 billion market cap.
• 190.48x trailing price-earnings ratio.
• Revenue is projected to grow 4.43% this year and another 7.14% next year.
• Earnings are estimated to increase 19.04% this year and an additional 22.56% next year.

Analyst and Investor Sentiment on Chewy:

I don’t buy stocks because everyone else is buying, but I do realize that if major firms and investors are dumping a stock, it’s hard to make money swimming against the tide.

It looks like not only Wall Street analysts, but also many of the popular investing advisory services, are moderately bullish on this stock.

• Wall Street analysts tracked by Barchart issued 19 “Strong Buy,” one “Moderate Buy,” and eight “Hold” opinions on the stock.
• Value Line gives the stock its highest rating and comments: “Shares of Chewy hold our Highest (1) rank for Timeliness. Furthermore, our projections point to worthwhile upside potential over the 3 to 5 year time frame.”
• CFRA’s MarketScope rates the stock a “Strong Buy” with a price target of $51.
• MorningStar thinks the stock is 48% overvalued but comments: “While a slew of players jockey for manufacturing and retail market share, Chewy’s service-intensive subscription-driven platform looks poised to capture a disproportionate share of online sales, with the firm building a strong brand around customer service and perceived quality.”
• 37,140 investors monitor the stock on Seeking Alpha, which rates the stock a “Hold.”

The Bottom Line:

Chewy currently has momentum and support from both the market and individual investors and seems to be beating its competitors Amazon, Petco, and Walmart.

I caution that CHWY is volatile and speculative — use strict risk management and stop-loss strategies.

Additional disclosure: The Barchart of the Day highlights stocks that are experiencing exceptional current price appreciation. They are not intended to be buy recommendations as these stocks are extremely volatile and speculative. Should you decide to add one of these stocks to your investment portfolio it is highly suggested you follow a predetermined diversification and moving stop loss discipline that is consistent with your personal investment risk tolerance.