Load Up On This Restaurant Stock

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Serge Berger is the head trader and investment strategist for The Steady Trader. Sign up for his free weekly newsletter.

While markets are still weary of the constant uncertainty in recent years, year to date, all sectors in the S&P 500 are in the green. Not surprisingly, given Apple’s (NASDAQ:AAPL) strong run and heavy market capitalization, the technology sector is leading to the upside. In second place, however, is the consumer discretionary sector, up just about 15% for the year. A strong consumer discretionary sector both in relative and absolute terms is a good sign the bulls are in control at least for a while longer.

One subgroup of the consumer discretionary sector that has gotten my attention due to the strong charts and reasonable fundamentals is the restaurant sector. From The Cheesecake Factory (NASDAQ:CAKE) to Brinker International (NYSE:EAT) and others, the charts look to seek higher highs in the near term if they can push through resistance.

Take DineEquity (NYSE:DIN), for example. The stock has had good resistance all year near $54.75, and after briefly piercing above that level in early August, fell right below that level and has been consolidating there since then.

From a price momentum point of view, the stock has further upside. And the stochastics indicator has come nicely out of overbought levels and looks poised to move higher again. A break and hold above $54.75 on a daily basis should set up a trade with an initial target at $60 and an initial stop near $52.

DIN Chart


Article printed from InvestorPlace Media, https://investorplace.com/2012/08/trade-of-the-day-dineequity-nyse-din/.

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