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Given the overall resilience of the group, I thought it would be instructive to update my fast food stocks series. McDonald’s (MCD) has been a true leader, and is currently building a bullish cup and handle pattern. Yum! Brands (YUM) has drifted back in a fairly orderly manner to a major support trendline from the end of January, as well as the convergence of the 20 and 50 day moving averages. Jack in the Box (JACK) has moved back up to the crucial $22 zone in a virtual straight line, and a base here would be constructive, above all moving averages. Sonic (SONC) is far from a broken chart, but it has basically been broadly consolidating since a huge move higher at the end of April. As I wrote in another post, Nathan’s Famous (NATH–very thinly traded, so be careful) has seen a nice, seasonally strong run into the July 4th Coney Island Hot Dog Eating Context (it is a sponsor). Canadian favorite Tim Hortons (THI) is basing just under its 50 day moving average. I would look for a move up through $47 to get involved.
Finally, I continue to stalk Wendy’s (WEN), due to its biggie size accumulation since late-January. Although the stock has gone nowhere, I expect that the bevy of big buyers will eventually catapult price up through $5.20.
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I’ve been involved with WEN since just after the takeover, with a cost of $4.20.
DO NOT expect to make much with this unless Peltz is ready. That is not right now.
If you do buy, prepare for some period of low-risk/low-volatility frustration. Then a move to 7.50 then 9.50…
Nice cost. If it clears $5.20/$5.25, I’d expect a lot of momo players to jump in.
The owners will not allow momentum players. They will cap the stock as they have done before…Their investment is large enough to maintain control. That is the way they roll…
I was initially attracted to the very cheap valuation but quickly found out the real deal. I decided to keep it because it’s of super-low risk profile. And “eventually” it will bring me a 50%+ move…
looking at the ATR on WEN, its a slow mover.