During Friday's Mad Money program Jim Cramer told viewers his game plan for this week. On Thursday, we'll get earnings from Darden Restaurants (DRI) , and Cramer is expecting a bullish report as Darden is one of the last restaurant names still standing amid the pandemic.
When we last looked on the charts of DRI on Dec. 9 we noted that "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." Let's look at the charts again ahead of earnings.
In the updated daily bar chart of DRI, below, we can see that prices dipped in January but not as deep as the $99 area. Prices subsequently rallied to $130 and more. Now what do the charts suggest?
DRI is trading above the rising 50-day moving average line and above the rising 200-day line. The On-Balance-Volume (OBV) line has hardly moved higher in the past three months and that is a bearish divergence when compared to the price action making new highs. The Moving Average Convergence Divergence (MACD) oscillator has just crossed to the downside for another take profit sell signal.