In the popular 'Lightning Round' segment of the Mad Money program, Jim Cramer takes calls from viewers in a rapid fire approach and gives "shoot from the hips" answers. Here's what Cramer had to say about Dine Brands Global (DIN) Monday evening:
Dine Brands: "No, I don't like restaurants here," replied Cramer. Let's check out the charts and indicators of the owner of Applebee's and IHOP.
In this daily bar chart of DIN, below, we can see a devastating decline from the middle of February as prices plunged from about $105 to around $15. This is a decline that typically unfolds over months or even years but it happened in just a matter of weeks. From my experience of looking at charts since 1964 at the tender age of 13, this kind of melt down requires a new building process that can take many months.
Prices are well below the declining 50-day moving average line and the bearish 200-day moving average line. Moving averages are lagging indicators but it is likely going to be a long time before these indicators bottom.
The daily On-Balance-Volume (OBV) line shows a sharp rise in recent sessions suggesting that new buyers have been very aggressive at these lower levels.
The Moving Average Convergence Divergence (MACD) oscillator crossed to the upside for a cover shorts buy signal in late March but an outright go long signal will take some time.
In this weekly bar chart of DIN, below, we can see that prices broke the lows of 2017 thus giving buyers over the last five years a loss. The 40-week moving average line has a negative slope.
The weekly OBV line has been in a decline the past five years and the MACD oscillator is bearish. Hard to get bullish with these indicators.
In this daily Point and Figure chart of DIN, below, we can see a small bottom pattern and a potential upside price target in the $64 area.
Bottom line strategy: My middle son is the chef at a restaurant that is trying to get by with curbside pickup until New Jersey Governor Murphy gives the all clear. The restaurant and the kitchen are not designed for take out so I can imagine what DIN is up against. While DIN has made a low in March and a slightly higher low in early April I do not see this as enough of a base to support a new uptrend. Avoid the long side for now.