For his Executive Decision segment of "Mad Money" Wednesday, host Jim Cramer spoke with David Gibbs, CEO of Yum Brands Inc. (YUM) , parent company of the KFC, Taco Bell and Pizza Hut restaurant chains.
When asked about plans for reopening the company's shuttered dining rooms, Gibbs said they are following guidelines and are already implementing face masks and shields as well as taking employee temperatures. Gibbs said Pizza Hut is a great brand that's providing a lot of value with its contactless delivery option.
After Covid-19, there will be a lot fewer restaurants in the world, Cramer concluded, but Yum Brands will be among them.
Let's check out the charts of YUM.
In this daily bar chart of YUM, below, we can see that prices peaked back in September and joined the broad market in February with a more dramatic decline into March. Prices have rebounded about half of the decline. Prices are above the declining 50-day moving average line but below the declining 200-day moving average line.
The On-Balance-Volume (OBV) line declined into the latter part of March, telling us that sellers of YUM have been more aggressive for months now. The OBV line has begun to improve, suggesting that buyers have returned in recent weeks. The Moving Average Convergence Divergence (MACD) oscillator has improved enough to cross the zero line for an outright go long signal.
In this weekly bar chart of YUM, below, we can see the depth of the decline this year. Not pretty. Prices are still below the declining 40-week moving average line. The weekly OBV line was in a decline from October to March and shows some recent improvement. The MACD oscillator on this longer time frame is just about to cross to the upside for a weekly cover shorts buy signal.
In this daily Point and Figure chart of YUM, below, we can see that an upside price target in the $101 area is projected.
Bottom line strategy: There are enough positive signals on the charts of YUM to anticipate further gains, but the likelihood of chart resistance increases above the $95-$100 area.
