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Whole Foods fails to deliver

Whole Foods shares took a nosedive in after-hours trading Wednesday after the organic food grocer reported better-than-expected earnings per share, but failed to deliver on revenue.

The company posted third-quarter earnings of $0.41 cents per share, $0.02 cents higher than analyst estimates. Revenue fell short at $3.38 billion, lower than the expected $3.39 billion.

(Read: Whole Foods shares drop on weak guidance, sales)

Now, Whole Foods hasn't exactly been a crowd pleaser so far this year. The company has lost nearly 35 percent of its value since January, and is the second worst performing stock in the S&P 500.

So, what are the chances this stock could turn a corner?

"Some of the Wall Street analysts need to take off the rose colored glasses, because they seem to think that this is going to be a turnaround stock in the second half of this year and next year," said Erin Gibbs of S&P Capital IQ, who doesn't see any reason to own the stock.

Gibbs said there are two main reasons why she isn't buying Whole Foods: disappointing earnings and increased competition. "I think this stock could still go lower unless we really see some proof of a turnaround."

(Watch: Uncomfortable ride in Whole Foods)

MKM Partners chief market technician Jonathan Krinsky said the charts could present a short-term buying opportunity, but stressed the long-term trend is still weak. "Our view on Whole Foods, on the charts, is that it really depends on the time frame."

"The stock is down around 40 percent from recent highs, but what's important here is where it found support, right at that $37 [per share] area. That was resistance or where it topped out way back in 2005," he said. "Look for a move up to $42 [per share], but if it loses that $37 support, we want nothing to do with it."

But according to Krinsky, one of the stock's key moving averages is sounding the alarm for longer-term investors. "The stock has been below its 200-day moving average for several months now, and what's even more concerning is the 200-day [moving average] is sloping downward," he said. "We wouldn't suggest buying it here."

Check out the video above for the full discussion on today's episode of CNBC "Street Signs."

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