• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing

4 Bearish Restaurant Names, and a Bullish Look at PayPal

These casual-dining names are showing bearish Relative Strength and price has broken below support.
By TIMOTHY COLLINS
Mar 22, 2016 | 10:45 AM EDT
Stocks quotes in this article: PYPL, BLMN, CHUY, DENN, RRGB

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.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, Collins was long PYPL, although positions may change at any time.

TAGS: Investing | U.S. Equity | Stocks

More from Investing

Shares of General Motors Could Begin to Bottom Out

Bruce Kamich
Jul 7, 2022 1:11 PM EDT

Here's the area where a rally is possible.

You Could Say I'm 'Fed' Up With These June Minutes

Jim Collins
Jul 7, 2022 12:30 PM EDT

From one logic-defying FOMC statement to the next, I'm not sure what I'm even reading at this point. But I do know how I'm investing.

As Harmony Biosciences Breaks Out to a New High, What's Next?

Bruce Kamich
Jul 7, 2022 12:20 PM EDT

Here's where traders could go long.

Here's Where Shares of Walmart Are Attracting Buyers

Bruce Kamich
Jul 7, 2022 11:45 AM EDT

Only nimble traders need apply.

Kass: Why I'm Aggressively Buying Bank and Brokerage Stocks

Doug Kass
Jul 7, 2022 11:30 AM EDT

For me, it's the time to be an opportunistic buyer

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 09:41 AM EDT STEPHEN GUILFOYLE

    Reweighting Portfolio Positions Through 5 Trades

    Check out what we're doing in the TheStreet's Stoc...
  • 12:01 PM EDT PAUL PRICE

    A Recent Director Buy in Children's Place (PLCE)

    Four of the most recent insider trades in Children...
  • 07:34 AM EDT PAUL PRICE

    A $525,000 Vote of Confidence on Macerich (MAC)

  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2022 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

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

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.

FactSet 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.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login