Trade of the Day: Chuy’s Holdings Inc (NASDAQ:CHUY)

CHUY broke out of its consolidation and should continue higher

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Chuy’s Holdings Inc (NASDAQ:CHUY), a Tex-Mex restaurant chain, turned in a solid Q1 earnings report on May 3. The company beat on earnings and revenue, thanks to strong growth both in comparable-restaurant sales and through adding new locations — and Wall Street rewarded it by taking shares 7.6% higher the following session.

Afterwards, CHUY consolidated those gains…then, on Monday, it broke higher again. That move confirmed a bullish Symmetrical Continuation Triangle on CHUY’s chart; from here, the Profit Scanner powered by Recognia is looking for 16%–20% further upside.

As you can see in the chart below, the pattern consists of two converging trendlines as the stock makes lower highs and higher lows. When the stock closes above this “triangle,” that’s a signal that it’s done consolidating and is ready to resume the prior uptrend.

Trade of the Day: Chuy's Holdings Inc (NASDAQ:CHUY)

Now that Chuy’s has made its move, Profit Scanner sees the stock continuing higher to $40–$41.25 over the next three months or so.

Traders may be able to see some bullish gains well before that, too. CHUY gave two other signals in Monday’s session, from the Commodity Channel Index and Short-term KST oscillators — both of which basically indicated bullish momentum and further upside in the short term as well.

Profit Scanner powered by Recognia can help traders of all levels uncover these signals to determine the best timing to buy. Or use Profit Scanner’s technical insight to validate your own trading ideas. See how easy this powerful tool is to help you uncover hidden opportunities in the market.

Profit Scanner powered by Recognia can help traders of all levels uncover these signals to determine the best timing to buy. Or use Profit Scanner’s technical insight to validate your own trading ideas. See how easy this powerful tool is to help you uncover hidden opportunities in the market.


Article printed from InvestorPlace Media, https://investorplace.com/2016/06/trade-of-the-day-chuys-holdings-inc-nasdaq-chuy/.

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