Red Robin Gourmet Burgers (RRGB) has turned around on the charts over the past seven months, and a 2017 rally is now on the menu.
In this 12-month daily chart of RRGB, above, we can see a "final low" in October, but prices have rallied to break above the June and August highs to complete a seven-month base pattern. Prices are now above the rising 50-day moving average line and above the still declining 200-day moving average line.
The daily On-Balance-Volume (OBV) made its low with the price action in October. The upturn in the OBV line the past two months signals more aggressive buying. Momentum has slowed from November to December, so we may see some more sideways price action in the short run before renewed strength.
In this three-year weekly chart of RRGB, above, we can see how prices were cut in half from the 2015 zenith. After finding buying interest below $45, the price of RRGB has firmed above the declining 40-week moving average line. The weekly OBV line has stabilized since May and has improved since October. The weekly Moving Average Convergence Divergence (MACD) oscillator is almost back above the zero line for an outright go long signal.
Bottom line: starting with the dessert first, RRGB could rally into the $70-$75 area in the first half of 2017. I would try to buy a dip to $55 and risk a close below $51.