Restaurants and the Holidays
The restaurant group has been on fire, with several swing trades from the IBD50 performing exceptionally well. Shake Shack (SHAK) first appeared on the watchlist back in September, when CAKE, DRI, DNKN caught our attention. All of these stocks were breaking higher, out of sound bases, Phase I and started new bullish trends Phase II.
The list below comprises many of the stocks in the group. Courtesy TheStreet.
SHAK continues shining as its RS, the IBD version of relative strength to its peers, reflecting how well the company is performing, climbs to the highest level it’s been in over a year. RSI muscle can stay elevated and MACD shows bulls like the stock. Volume illustrates institutions are actively adding shares. That said, this stock was an original entry at the 32.00 (+/-) zone. Look for a pullback to the 9ema for new entries.
WING is new. This stock was highlighted on the watchlist for the week. Monday saw a “continuation day” and a bullish follow through on volume. Note Bollinger Bands are expanding top and bottom, which points to a fast move, even after the current breakout. Use the Trade of the Day setup if you’d like to take a shot at this stock.
SBUX is a swing from a post-earnings entry in the 55.50 (+/-) zone. The flag this week looks promising. Once bagholders are taken out, we should resume our journey to the ultimate target, the May pivot high at 64.24.
Darden reports on December 19, so this would be a short-term trade into that event. Targets 88.57 the 89.50 (+/-). Look for a breakout today or tomorrow, otherwise the closer we get to earnings the less interested we are in trading this candidate.
As always, we will talk about these candidates during the LIVESTREAM broadcast during market hours. Join us at 9:20 AM until the Closing Bell.
PS. Congrats to Mikey (@heartpumper) and the team in the trend following channel. Nice work traders and great teamwork.
Traders Tip: Use the “ABCD” pattern to your advantage. Look for it every day. If you do, your trading will improve using this simple observation. Strong in the morning produces the 1) Pivot high for the day followed by 2) tapering volume and activity which resumes after the noon hour, producing 3) “BC” higher lows.
If you enter early in the morning “Opening Range” look for “A” if scalping. If you are swinging you can place your stop at “B” once the trade starts creating higher lows. Once price reaches the High of the Day, consider swinging half and taking profits if you are day trading.
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