We have not reviewed the charts of Red Robin Gourmet Burgers (RRGB) for almost a year, and way back then we said, "Starting with the dessert first, RRGB could rally into the $70-$75 area in the first half of 2017."
As it turned out, RRGB rallied to $74 by May and then reversed direction. Prices gapped sharply lower earlier this month.
Is RRGB stuck in the weeds or can we see a recovery rally in the months ahead? Let's review the updated charts for some help with the menu.
In this daily bar chart of RRGB, above, we can see that prices plunged this month but have held the February lows in the $46-$45 area. Prices are well below the declining 50-day moving average line and the flattening 200-day line. The On-Balance-Volume (OBV) line was moving up the past 12 months but broke sharply lower this month as sellers became more aggressive. The Moving Average Convergence Divergence (MACD) oscillator is crossing to the upside for a cover-shorts buy signal.
In this weekly chart of RRGB, above, we can see prices are below the flat 40-week moving average line. The weekly OBV line is very bearish, making a new low for the move down -- much different from the daily chart. The MACD oscillator on this timeframe is below the zero line for an outright sell signal.
In this Point and Figure chart of RRGB, above, we can see the selloff without the gap. There is a relatively nearby price target of $56.
Bottom line: RRGB could rally to fill part of the large gap overhead, but right now it does not look like prices can rally above the 200-day line. Fresh accumulation needs to be seen to justify a more bullish stance. With some M&A activity in the restaurant industry recently, you never know if the chart will change with a press release.