We looked at the charts and indicators on Brinker International (EAT) about a month ago. We were seeing some positive developments on the charts and concluded that, "Traders should not be short EAT as it is giving early signs of an upside reversal. Aggressive traders could probe the long side of EAT on strength above $44, risking a close below $41.50."
Let's take a fresh look at the charts of casual dining Dallas based Brinker and see how things are progressing.
In this updated daily bar chart of EAT, below, we can see that over the past month the stock has rallied above $44 so we assume that some readers of RealMoney may have gone long. Prices stopped short of $46 and then pulled back. Notice how prices retreated to retest the now rising 50-day moving average line. The On-Balance-Volume (OBV) turned up in the second half of April as trading volume increased. The daily Moving Average Convergence Divergence (MACD) oscillator has given a fresh buy signal when it crossed above the zero line in late April.
In this updated weekly chart of EAT, below, we have mixed clues. Prices have improved a touch since early April but we are still below the declining 40-week moving average line. The weekly OBV line is still pointed lower but the MACD oscillator has crossed to the upside giving us a cover shorts buy signal.
Bottom line - I believe that a price low for EAT is in place. A low is not the same as a bottom and EAT is likely to make a longer/wider bottom in the weeks ahead. I suspect that the rising 50-day moving average line will offer support and another upside test of $46 could be seen in the short-run. A close above $46 could open the way for further gains to around $50-$51.