During the fast-paced Lightning Round of Jim Cramer's Mad Money program Thursday night, one caller asked about Yum! Brands ( YUM) : "I like Yum Brands very much," Cramer responded. YUM is the owner of brands like Taco Bell, KFC, Pizza Hut, and WingStreet - names known in many households around the world.
Let's see if the charts point higher.
In this daily bar chart of YUM, below, we can see that if you ignore the "carbs" the chart is attractive. Prices are above the rising 50-day moving average line as well as the 200-day line. You can see a bullish golden cross of these averages way back in last September.
The On-Balance-Volume (OBV) line shows a rise from late October into the middle of August. A small bearish divergence is showing up now with prices making a new high but the OBV failing to do the same.
The 12-day price momentum study shows a lower high in August than June despite prices making higher highs. This is another bearish divergence. These divergences are not huge so we may only see a sideways correction.
In this weekly bar chart of YUM, below, we can see that prices have doubled in the past three years. Not a cloud stock but not bad. Prices are above the rising 40-week moving average line.
The weekly OBV line is generally positive but the Moving Average Convergence Divergence (MACD) oscillator has narrowed towards a possible crossover in the weeks ahead.
In this weekly Point and Figure chart of YUM, below, we can see that prices have reached and exceeded a price target. The same issue can be seen on a daily chart. YUM can move higher but a period of sideways consolidation would be welcome.
Bottom line strategy: The combination of some bearish divergences and reaching a price target suggest that YUM could trade sideways for a few weeks to consolidate its gains. New highs could be coming in the fourth quarter of the year.
