The popular chain, Popeyes Louisiana Kitchen (PLKI) has outlined a top formation and is likely to work lower in the weeks ahead.
Prices of PLKI have been stalled in a relatively tight range for the past year with a weakening On-Balance-Volume (OBV) line telling us that volume has been heavier on down days. Also, the price of PLKI just broke below the flat 50-day and 200-day simple moving averages.
This long-term chart of PLKI shows a couple things worth nothing. First, prices have had a meaningful rally since late 2011, so we have something to reverse. Second, the OBV line does not really confirm the rally in later 2014 where prices made a new high for the move up. And last, prices have declined below the 40-week moving average, which has begun to turn down. Chart support for PLKI comes in around $40, which could be reached next year.