Buyers Hungry for EAT

Brinker International broke out on high volume following earnings

   

Buyers Hungry for EAT

Brinker International (NYSE:EAT) – This company owns, operates and franchises the Chili’s Grill & Bar and Maggiano’s Little Italy restaurant brands. Investors were pleased with its earnings report yesterday, and the stock was bid up more than 10% on the day. Chili’s comps were up 4.6% quarter over quarter, and the company still sees a doubling of earnings per share by 2015.

On the charts, the stock put in a great breakout yesterday on wonderful volume, albeit right at a multi-year high. Thus, there is a chance yesterday’s strong price action was an exhaustion gap and the price will come crashing down soon.

The consumer discretionary sector to which the stock belongs is still up 12% on the year and going strong, although if the broader market cools off, that sector will also suffer. Regardless, traders and investors must spot good probability setups, define their risk and stick to the plan — the last of which always proves to be the most difficult.

Yesterday’s trade started with a $2 gap up, which opened right above the March highs. Defined risk here may lead a trader to put a stop near the $29 mark and a price target near $35.

04 24 12 eat 300x210 Buyers Hungry for EAT
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Article printed from InvestorPlace Media, http://investorplace.com/2012/04/trade-of-the-day-brinker-international-nyse-eat/.

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