Casual Dining is Formally Heating Up

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Of the high growth, broad market momentum leaders since 2009, Chipotle Mexican Grill had arguably held up the best during the turbulence in the latter-half of 2011. Indeed, CMG continues to be one of the leaders in this group and the market as a whole. Beyond the burrito empire that is Chipotle, though, there are too many other improving charts in the casual dining space for me to post all of them here.

Panera Bread Company hit all-time highs on Friday, as a play on bagels/coffeehouses/soup & sandwiches, free WiFi for single, attractive, young female teachers to grade papers (oops, did I say that out loud?). On that note, Caribou Coffee Company saw a strong weekly breakout, as a coffeehouse/K-Cup play. Thus, I would be remiss not to include Einsein Bros. Bagels (Einstein Noah Restaurant Group, Inc.) as a speculative play in that space. In addition, there are sleeper names like Red Robin Gourmet, which broke out on strong buy volume to finish last week, despite the broad market’s opening gap lower Friday morning.

We are now in earnings season, and the overall market still needs to continue to prove itself. Thus, I am not getting carried away with a “Casual Dining or Bust!” battle cry here. However, the group as a whole is vastly improved, and is showing impressive relative and absolute strength, which is why it merits your close attention in the coming weeks.

Members of The PPT and 12631 can click here to see every stock in the entire industry sorted by PPT Technical Score.

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