Scripps Networks Interactive (SNI) has formed a nice bottom pattern on the charts and looks poised for further gains. In full disclosure, as the father and father-in-law of two Culinary Institute of America-trained chefs I often watch the Food Network when not watching the tape.
But let's take a look at the charts and indicators to see if SNI has the right ingredients for further gains.
In this one-year daily chart of SNI, below, we can see three different trends on SNI the past year. The first move was a rapid advance from a February low. This rally lasted until early April. The second move was a sideways consolidation trend from April until late October. From the second half of October SNI has started a new uptrend. Prices are above the rising 50-day and 200-day moving averages.
This is bullish, but the movement of the On-Balance-Volume (OBV) line is really impressive. Notice the uptrend in the OBV from late June. The OBV line broke out on the upside before prices broke out -- "volume precedes price" is the old Wall Street saying. The Moving Average Convergence Divergence (MACD) oscillator is in a bullish configuration and has been since October.
This longer-term weekly chart of SNI, below, shows a double-top formation up around $85 followed by a steep decline. Prices have turned around on the upside with prices above the rising 40-week moving average line. The weekly OBV has been very positive since late 2015 and the bullish MACD oscillator is just icing on the cake.
Bottom line: I would go long SNI around current levels risking below $68 for now, but look to raise the sell stop to below $70 when SNI closes above $76. The upper $80s is our price target.