Dunkin' Brands Group (DNKN) got a "two notch" fundamental upgrade by Credit Suisse on Monday, but I doubt if the analyst who wrote the analysis paid much attention to the charts. So, why don't we check out the trends and indicators?
In this daily bar chart of DNKN, below, we can see that prices were in a weak condition before the broad market decline in February and March. Prices traded sideways between $75 and $85 for months and crisscrossed the 50-day and 200-day moving average lines. Prices were quickly cut in half to $40 from $80 in the bear market rout.
Even though prices moved sideways, the On-Balance-Volume (OBV) line declined from June to March, telling us that sellers of DNKN have been more aggressive for months. The OBV line has come off its March nadir, but it has not responded as well as prices have and that suggests that prices are not well supported.
The Moving Average Convergence Divergence (MACD) oscillator crossed to the upside in March for a cover-shorts, Buy signal, but this month an outright go-long signal seems to be out of reach for several weeks.