In his No-Huddle Offense segment of Mad Money Tuesday night, Jim Cramer said when it comes to public health, there aren't two sides to the story. Some restaurants, like Darden Restaurants (DRI) , are run by professionals and have what it takes to stay open during the pandemic.
Let's check out the charts and the menu.
In this daily bar chart of DRI, below, we can see how prices have recovered from their huge February-March decline. Prices retested the February zenith in early November but retreated. DRI is trading above the rising 50-day moving average line and above the bottoming 200-day moving average line.
The On-Balance-Volume (OBV) line has moved up from March in a stair-step-like manner.
The Moving Average Convergence Divergence (MACD) oscillator is above the zero line but could easily turn up or down.
In this weekly bar chart of DRI, below, we can see a bullish alignment of price and indicators. Prices are trading in an uptrend above the bottoming 40-week moving average line.
The weekly OBV line continues to post gains from March and confirms the price strength we have seen this year.
The MACD oscillator is clearly bullish.
In this daily Point and Figure chart of DRI, below, we can see a potential downside price target in the $99 area.
In this weekly close only Point and Figure chart of DRI, below, we can see a potential $130 price target.
Bottom line strategy: Traders will need to be nimble with DRI. Think about taking some profits and sidestep a decline to $99 or lower. Early 2021 could see a rally to the $130 area. Stay alert.
