The Kroger Co. (KR), the largest U.S. grocery store chain, is on the cusp of a major breakout. And the technical charts are signaling that this could be a breakout higher. The grocery chain has been under pressure from increased competition. News last week about Amazon.com, Inc. (AMZN) launching anot🧸her grocery store brand didn't help.

However, Kroger has many competitive advantages over its competition, and it is a lead innovator in the grocery sector. The company has a trove of data on its consumers and their shoppi🌸ng habits. It has a three-part agenda going forward to utilize technology, automation and big data analytics to grow its operations.

This innovation is what helped the stock break out of a long-term 澳洲幸运5开奖号码历史查询:downtrend in July of last year. Take a look:

The red 澳洲幸运5开奖号码历史查询:trendline marked the key highs during the downtrend. When those levels were broken in July, the stock began a new uptrend.

Now the stock has formed a new pattern. It has been trading in a narrowing wedge formation, where the support and 澳洲幸运5开奖号码历史查询:resistance lines are closing in on each other.

In the wedge pattern above, the red line acts as resistance, and the green line is support. Once shares break out of this formation, a big 🧜rally or decline will likel𓆏y take place in quick fashion.

The key sign of an upside breakout, tღhough, is that the green support level has been tested four or five times, depending on where you draw the line. The resistance has been tested just twice, signaling that the support is stronger. It is also the longer lasting of the two trendlines, suggesting that shares will contin𓆉ue to climb.

The height 🌺of the wedge pattern is $9. With the stock trading at around $29, this implies that a 30% move is 🧜about to take place for Kroger shares over the next few months.

Kroger is set to report earnings on March 7, and we could see a double-digit move on that report alone. That will likely be the day Kroger stock breaks out of this wedge patteꦯrn, and it could be the start of a much larger uptrend for the stock. However, If Kroger stock fails to break out higher from this wedge pattern, the downtrend will take over and send stock below $20 per share in the coming months.

The Bottom Line

Kroger stock is set to make a big move. Based on the stock's wedge pattern, I expect a 30% breakout to the upside in the coming months. Earnings on Thursday could be the start of that major rally.