In our March 2 review of Domino's Pizza (DPZ) we saw a number of bearish clues. Tuesday, a fundamental analyst at Cowen cut their rating on DPZ to "market perform" due to a lower store growth forecast. Let's check the latest charts for a forecast.
In the daily bar chart of DPZ, below, we can see that prices have moved sharply lower this calendar year so far. Prices are trading below the negatively sloped 50-day moving average line. The slope of the 200-day line is also bearish.
The On-Balance-Volume (OBV) line shows a decline from August and only some stability in March -- not very convincing. The Moving Average Convergence Divergence (MACD) oscillator is still bearish but trying to reach the underside of the zero line.
In the weekly Japanese candlestick chart of DPZ, below, we see a picture that is still unfriendly. Prices are in a downtrend as they trade below the declining 40-week moving average line. I fail to see convincing lower shadows to suggest that traders are rejecting the lows.
The weekly OBV line is pointed lower. The MACD oscillator is bearish.
In this daily Point and Figure chart of DPZ, below, we can see a potential downside price target in the $333 area.
In this weekly Point and Figure chart of DPZ, below, a price target in the $279 area.
Bottom-line strategy: The charts and indicators of DPZ are not appealing and the fundamental story does not sound great. Traders should avoid the long side of DPZ.
