There are several name appropriate stocks for Father's Day, but after reviewing several, I'm going with Papa John's (PZZA) here as it has one of the stronger charts of the dad group.
After a disastrous January, PZZA roared back to life. A strong February climb created a March-April cup-and-handle pattern. The breakout in May has seen the pattern targets complete, so here we sit in a tight rising wedge pattern. While the overall price action is bullish, the rising wedge creates a bit of a precarious position here. A close under $62.50 and we'll have a bearish price breakdown on our hands. Resistance isn't clear cut here, but I would place it around $69-$70 using the highs in the fall and winter of 2015 as key. I suspect we'll see those levels before we see a breakdown. The stock has been riding its five-week simple moving average (SMA) and while it is a tight average, we've seen the most volatile trades come after it has gone flat. We don't have that currently, so it's a positive for the bulls.
Overall, every indicator is still bullish. But there are yellow flags pending in the Full Stochastics and Chaikan Oscillators. A bearish crossover in the Full Stochastics while in overbought territory would be of concern as is the dip of the Chaikan Oscillator under the 13-week SMA. The last big drop occurred after these two were in place, but, and this is important, we also saw bearish crossovers in the MACD and StochRSI before those big drops. Those conditions are present at the moment. I would look for a repeat of the technical setup we saw in July 2015 before I converted to a PZZA bear here.
The monthly picture appears stronger in my view for those with patience. The price pattern is pushing through resistance and not only has the $70 target in its sights, but a new high isn't out of the picture here. Trading back over the 13-month SMA is important, but should that fail, the 21-month SMA has worked as support for five years running. The On Balance Volume has been playing ping pong with the 13-month SMA, but trading above it has clearly been superior and we are back in that conditions. What I'm drawn to most here is the early year cross in the StochRSI with the RSI back over 50. A push by the MACD into bullish territory would seal the deal on new high expectations.
We may need the summer to see that happen, but should it occur, the second half of the year could be very strong for PZZA. If one uses new highs as the upside target and the 21-month SMA as the stop level, there is an attractive risk-reward here.
Maybe not today, but PZZA stock looks to be a decent Father's Day gift for your portfolio in 2016.