Still Smelling Higher Prices in Panera

 | May 06, 2013 | 8:30 AM EDT  | Comments
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Stock quotes in this article:

pnra

A trade setup in Panera Bread (PNRA) has already triggered a buy entry against a key support level. But, since the stock has not yet met the upside targets, we still have reason to consider another buy-side entry.

Panera (PNRA) -- Daily
Source: Dynamic Trader

The original trade setup was a simple symmetry (or "measured move") setup -- the stock had declined $16.09 to an April 24 low, quite similar to a prior pullback of $15.94, as illustrated on the daily chart. That prior move suggested a low around $169.73, and the actual low came in close by -- at $169.58 -- on April 24.

With the stock on the rise once again, the initial upside target is about $190.05, and that level is still above Friday's closing price of $180.84. Given this, I would still like to buy Panera on a pullback. We should also be aware of another old target -- $188.61 -- that comes from a prior larger swing, as the stock may shoot for that level as well.

As mentioned, a trigger for a swing trade already fired off around April 30. Besides the original setup, several factors support a continued rally. First, daily and weekly charts show general pattern of higher highs and higher lows. Second, the price is clearly above both the 200-and 50-day simple moving averages on the daily chart -- and, third, the five-bar exponential moving average has crossed back above 13-day EMA on the daily chart. Bottom line: I like Panera for higher prices.

Panera (PNRA) -- 30-Minute
Source: Dynamic Trader

In order to keep an edge regarding another entry, you should ideally wait for a pullback to the last swing low on this 30-minute chart. Right now the pullback zone is between $173.95 and $176.83. The maximum risk on this setup can be defined below the April 24 low, though you can use a tighter stop if that suits you better.

For more information about trades and triggers, please refer here.

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