Stock Of The Day – Will The Move Higher In Sysco Continue?

Trading in Sysco Corporation (NYSE:SYY) is quiet on Thursday. This comes after yesterday's rally of more than 3%. There was no specific news related to the company. The price action was driven by technicals.

There is a good chance that the rally soon gets back in gear. This is why our technical analysis team has made it our Stock of the Day.

In the long term, Sysco may be facing some headwinds. Concerns over tariffs and inflation have caused consumer confidence to drop significantly. The consumer confidence index fell to a four-year low in March and future expectations are the lowest in 12 years.

This may impact Sysco because it is in the food service or food-away-from-home industry.  Dining out is one of the first things people will cut back on in tough times and restaurants are one of Sysco's main customers.

In the short run, the shares may continue to move higher.

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You can see on the chart that Sysco reversed off of support around $70.00 yesterday. This level was also supported in February. Stocks rallying after reaching a support level is common in the stock market. It is a result of buyer anxiety.

Support is a large concentration of traders and investors looking to buy shares at or close to the same price. Sometimes, when a stock gets close to a support level, some of the people who created the support with their buy orders become anxious.

They are worried that others will outbid them. They know that the sellers will go to the buyer who is willing to pay the highest price, so these anxious buyers increase their prices.

Other anxious buyers see this and decide to increase their bid prices as well. This can result in a bidding war that ends up forcing the price higher.

The uptrend in Sysco may continue.

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