It seems that too often we are talking or writing about another terrorist attack or tragery, and what to do in the wake of it. It's not easy to know. Sometimes you just want to throw your hands in the air and ask why.
The market is holding rather well, given the news out of Brussels this morning, but some profit taking, here, isn't a shock. I am a bit surprised gold is doing little, but we have already seen a large run. I believe today we're going to digest the news, so I'm not looking to do much in the way of reaction.
One sector I am concerned about at the moment is the smaller side of the casual dining sector. I ran a bearish breakdown scan and by far this sector was the largest component. We can spread across four charts and see similar patterns. Compare the charts of Bloomin' Brands (BLMN), Chuy's Holdings (CHUY), Denny's (DENN) and Red Robin Gourmet Burgers (RRGB).
Although not every indicator is exactly the same, the general view is the same. We see a Relative Strength Index under 50, indicating momentum is now bearish. We see the short-term trend is extremely bearish, as the Commodity Channel Indexes are all printing under -100, and the longer-term picture has recently turned bearish, as evidenced by the Moving Average Convergence Divergence. Lastly, price has broken below support, with wedge patterns being the most common in the group.
The only main difference I see is the relationship to the moving averages. Currently, CHUY holds the ugliest picture, followed closely by BLMN and then RRGB. DENN is the only stock trading over its 50-day Simple Moving Average at the moment.
This sector is an avoid at the moment, with three short candidates in this group of four. I would leave DENN out and likely focus on CHUY, here, as well as RRGB or BLMN.
If you want to take a look at a possible winner, check out PayPal (PYPL).
I know this may not be the processor of choice for restaurants, but I've seen many friends increasing their use of the company's digital wallet, Venmo. After hearing little about it, I must have had at least a half-dozen unrelated friends ask me if I was using it, recently.
The stock has seen positive action in the options market and it broke out of its bullish flag yesterday. Minimally, I'm targeting $43 here, but I feel that $45 to $47 is the ultimate summer target. This is a stock I'm willing to hold for the longer term as a core position, but I also want a trading position as well.
