The best part of the holidays is food. All right, the family, the smiles, the sharing, the friends and all that stuff ain't half-bad either, but who doesn't look forward to eating over the holidays? It's the whole reason health clubs exist. All right, I'm exaggerating there, too, but isn't the first week of January like an entire week of Black Fridays for the weight-loss/fitness sector? But I digress, so back to food.
Normally, I don't equate chicken to Christmas, but El Pollo Loco Holdings (LOCO) is on my breakout list again and looking much better this time around. Joining LOCO is Wingstop (WING) on the chicken tour. These are similar charts, but do have some subtle differences.
LOCO looks to be the stronger of the two. The bottom is longer and better defined and the stock is trading above the 10-day simple moving average (SMA) here. Also, we have the Relative Strength Index (RSI) breaking out along with price.
WING is still facing resistance on both the 10-day SMA and RSI. I like both, but prefer LOCO here and would wait for a close over $23 before tapping WING.
If those food names feel too aggressive, then maybe look old-school with Kellogg (K). Not much in the way of chicken here, but a strong chart nonetheless. The stock is breaking out from resistance after a "V" bounce. The RSI looks to be ready to take out $70 and the Commodity Channel Index (CCI) hints at a solid trend continuing.
I don't expect a ton from this one, but it wouldn't shock me to see K trade between $66 and $80 for much of 2016 with a possible push into the low $8's for a month or two. Toss in a yield of nearly 3% and enough of an options market to sell rolling covered calls, and I do believe this could be a decent play.
A quick side note: If General Mills (GIS) closes over $60, I might prefer that one, but for now, we'll stick with the names on the board.