This year has been a struggle for the stock market. Even though the macroeconomic conditions still favor the bullish thesis, investor sentiment is low and negative. Traders have low conviction because of a slew of headlines. The two biggest worries are the tariff war and the inversion of the yield curve in the U.S.

Recently, we had some relief on both these fronts. But the consequent rallies did not last. Last week the bulls suffered devastating price action. The rally off these positive improvements on the two scariest at the front reversed fast.

However, there still are positive stories, and Kroger (NYSE:KR) is one of them. Even though the S&P 500 is struggling to stay flat for the past year, KR stock is up almost 10%. Today’s opportunity is to capture another leg higher from here.

This is not to say it hasn’t had its ups and downs but it has maintained an impressive higher-low trend. But now the trend is getting tested again and the onus is on the bulls to prove that they can maintain it, and the reward is a potential juicy rally.

Click to Enlarge Otherwise, KR stock risks retesting $24. This is not to say that it’s the forecast — it is a scenario that those who are long the stock need to know.

The problem for Kroger stock right now lies in the overall market action. It looks like we are headed into another rocky week on Wall Street as the Dow Jones drops on Brexit-induced selling.

And we have a new added wrinkle with another round of Brexit votes. This is in addition to the rhetoric surroundings the tariffs wars, especially between the United States and China.

Left alone, I believe KR stock will rebound to retest $32 per share. And therein lies the opportunity. If that happens then it would open the door for another breakout opportunity to new highs by January.

But first, the market, in general, must overcome the threat that may be coming this week. So yes, this is a trade on an upside opportunity but with caution. Kroger has the opportunity to take that upward step … provided the overall market complex doesn’t drag it down.

Unfortunately, there is a serious threat there. The S&P is bumping along a neckline that if lost would bring 2,440 into view and that would break the February Lows.

Other indices have similar technical makeup so all we need is one headline to trigger a 10% selloff in a matter of days. Again, this is not a forecast but a very likely scenario that could unfold in hours.

Technically, the same threat that lies in the overall market also exists in Kroger stock. The same ascending trend line presents today’s opportunity needs to held. Otherwise, it would open a bearish pattern trap door worth $6 dip.

Nevertheless, Kroger sells at a price-earnings ratio of 8x, so it is not expensive. Owning it for the long-term at these levels is not likely to be a financial debacle. I am confident that in the long-term if the markets go higher, so goes KR stock.

Bottom Line on KR Stock

KR is tough: It withstood the onslaught of Walmart (NYSE:WMT), Costco (NASDAQ:COST) and Amazon (NASDAQ:AMZN) infringing into its business. So management is proven. Case in point the stock is performing better than most other stocks in the industry. The SPDR S&P Retail ETF (NYSEARCA:XRT) is down 3% on the year vs KR is up 10% for the same period.

As for the macroeconomics threats, I believe that the world leaders will come to terms over tariffs because everyone has too much to lose and cooler heads will prevail.

And the Federal Reserve will not let the yield curve invert. Because they know that happens we will get a recession at the end of 2019. Banks will not lend on an inverted yield curve.

As they say, they don’t ring the bells for perfect entry points into stocks. But an entry into Kroger stock here for the long-term also has short-term upside potential starting right here, so it’s worth the risk.