The Cheesecake Factory (CAKE) — This operator of upscale, casual dining, full-service restaurants is suffering from weak same-store sales growth due to higher payroll taxes. Analysts are of the opinion that, in the current economic climate, the company will have a difficult time passing on increased costs to their customers.
The stock rose almost 35% in the past six months and appears to be topping. It failed to make a new high along with the major indices in early August, and selling pressure is building.
Its 20-day moving average (green line) is falling fast and should cross its 50-day moving average (blue line) soon for a short-term sell signal. MACD also issued a sell signal.
The support line at just under $40 could stabilize the stock, but it appears headed for a protracted downtrend. Sell CAKE if you own it.