During Monday's Mad Money program, Jim Cramer said that when it comes to the beaten-down restaurants Yum! Brands (YUM) caught his eye. Let's check out the charts and indicators to see what we see.
In this daily bar chart of YUM, below, we can see that prices turned lower back in September/October before the broad market decline that began in February. Prices made a successful low in late March and then rallied into early June before trading sideways to higher into September.
Prices are just above the rising 50-day moving average line and just above the bottoming 200-day moving average line. Trading volume has generally been declining from March.
The On-Balance-Volume (OBV) line shows improvement from March to June and then a sideways or neutral pattern. Buyers and sellers of YUM seem to be in balance for now.
The Moving Average Convergence Divergence (MACD) oscillator is just slightly above the zero line showing just a minor amount of trend strength.
In this weekly bar chart of YUM, below, we can see a mixed picture. Prices are above the 40-week moving average line but its slope is still negative.
The weekly OBV line has been neutral/steady since late May.
The MACD oscillator is just now crossing the zero line for an outright buy signal.
In this daily Point and Figure chart of YUM, below, we can see that prices have reached an upside price target in the $96 area.
In this weekly Point and Figure chart of YUM, below, we can see a potential price target in the $136 area.
Bottom line strategy: I just finished lunch but my mind is thinking about KFC, Pizza Hut, and Taco Bell. The charts of YUM look positive and traders could go long YUM in the $95-$90 area risking a close below $85. The $136 area is our Point and Figure target.
