How Do the Charts Look for Jim Cramer's Weekly Shopping List? Part 3

 | Nov 07, 2016 | 12:09 PM EST
  • Comment
  • Print Print
  • Print
Stock quotes in this article:

shak

,

wen

In Part 1 and Part 2 of our series we took a look at five stocks included in Jim Cramer's game plan for this week from a technical perspective. These are his "Mad Money" trading recommendations using their exclusive Stock Screener. You listened to him on "Mad Money" Friday or you read his views on these companies on Real Money, now here are the charts and indicators.

No matter who wins the election, Jim Cramer says, there are ways to make money. Now let's take a closer look at Shake Shack (SHAK) and Wendy's (WEN)  , which are also on Cramer's shopping list this week.

Which one might be serving up profits in the near future?

SHAK has been struggling on the charts. We do not have a lot of price history to work with but we can get a sense of the trends and intensity from this daily chart, above. This chart of SHAK could viewed in at least two ways. First, without trimming the chart from the left side, we can say that prices have trended lower the past year. The shares have been making lower highs in November 2015, December, March, and August. But SHAK has not made lower lows, which is the other half of the definition of a downtrend -- lower highs and lower lows. Prices are below the declining 50-day and 200-day moving average lines.

The On-Balance-Volume (OBV) line has a bull/bear split with a rising OBV line as prices improved from March to August and then a declining OBV line as prices slumped. The Moving Average Convergence Divergence (MACD) oscillator gave a "cover shorts buy signal."

SHAK can bounce but the current technical conditions do not yet suggest that a new sustained advance is about to begin. In this limited weekly chart of SHAK, above, we can see that prices are below the declining 40-week moving average line.

The OBV line is pointed down and the MACD oscillator has a bearish configuration below the zero line.

This daily chart of WEN, above, is whetting my bullish appetite. WEN has been rallying since late June at a time when many stocks have been on the defensive. WEN is trading above the rising 50-day moving average line and the rising 200-day average line. The OBV line has been choppy but it does show a low in early August and its movement has been more impressive since early October.

Price momentum has been slowing from September to October. This is a bearish divergence -- higher prices vs. weaker momentum -- but I don't get a sense that it will be a big impediment to near-term price gains.

This weekly chart of WEN, above, looks like a large triangle formation. With higher lows over the past 12 months, WEN looks like it is building up for an upside breakout. The 40-week moving average line is positive. The MACD oscillator is in a bullish setup -- rising above the zero line. The OBV line has yet to join the party.

Traders should look to go long or add to longs if WEN closes above $11.50. A close below $10 would make me question the bull case.

Columnist Conversations

Panera continues to power higher today. The stock has been gaining since the early going and is now near the h...
I've been beefing up positions in Sall Beauty Holdings (SBH) shares and selling (shorting) more SBH puts to ta...

BEST IDEAS

REAL MONEY'S BEST IDEAS

News Breaks

Powered by

BROKERAGE PARTNERS

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.


TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.