$7.5 level has held and it seems that the stock is able to get support there. Twice it has bounced from there to above $9. Despite this, the stock is still down about 16% on a 52 week basis. The recent results were better than expectations and that helped the stock to make another attempt to cross crucial averages. The management was happy about improvement in the gross margins and expects to turnaround on a full year basis in 2013. NTRI is poised to cross the $9 level which has proved to be a problem earlier. So if it is able to cross $9 with volumes and spend some time there, then things will become easier. The key to success is cost rationalization. The company is working hard on that front and the lower revenue for Q1'13 was attributed to reducing focus on loss making segments. For sales growth, NutriSystem will have to be on the lookout for new innovative products. ChromaDex Corporation (CDXC), a small company in the Nutrition / supplement industry, has been quietly building a healthy pipeline of innovative products. Its investors Barry Honig, Dr. Frost etc. have been increasing stake in the company based on the potential of ChromaDex's proprietary ingredients. NutriSystem has to remain on the lookout for offerings from these smaller companies and also look for inorganic growth. This way it can have access to profitable and successful products. This will help smooth the earnings curve and make it a more stable company based on fundamentals. For the stock, longs will be advisable only if it crosses $9. Otherwise, the support levels of ~$7.50 may be a good buying point, but with a strict stop loss. So if it remains range bound, which is a likely scenario, then it is better to trade accordingly. But the future will squarely depend on improvement in the fundamentals.
