Bulls continue to dominate the Street. Last week’s muscle-flexing was simply the latest evidence of their reign. Today’s gallery will help you embrace the trend by offering up three food stocks to buy.
As you might expect after a week where buyers ran the table, my weekend scanning revealed uptrends galore. And many of them offer chart patterns worthy of mention. While the sector representation was as diverse as usual, I did notice one particular theme – food stocks.
Pizza, burgers and jelly all made an appearance on this week’s stocks to buy list. While one sits a stone’s throw from record highs, the other two have only just recently gotten their mojo back.
All three boast lower-risk setups if you want to add some nutrition to your portfolio. Let’s take a closer look.
Food Stocks to Buy: McDonald’s (MCD)
McDonald’s (NYSE:MCD) tops the list and deservedly so. The long-term trend is gorgeous and last week’s ramp ushered it to the brink of a big-league breakout. Momentum increased during its most recent upswing confirming buyers are strengthening their grip.
Since mid-November, MCD stock has been consolidating in a trading range that is now on the cusp of completing. The series of higher swing lows reveals increasing buying appetite and have morphed the box into more of an ascending triangle.
For the past six weeks, distribution days have disappeared showing zero institutional distribution. Throw it all together, and the wind is at buyers’ backs.
If you think the trend continues, then buy the June $190/$200 bull call spread for $3.90
J M Smucker Co (SJM)
The past two-and-a-half years have seen a sloppy downtrend descend on J M Smucker (NYSE:SJM) shares. From peak to trough, the food company fell 42%. But if recent price action is any indication, the worst is over. Last month’s breakout above the 200-day moving average scored solid followthrough. The upside thrust was enough to turn the 20-day and 50-day moving averages higher.
And since pole-vaulting higher, SJM stock hasn’t given back an inch. The two-week high base pattern has the stock itching for an upside breakout.
Volume patterns are lending a hand to the bullish argument as well. Accumulation days litter the landscape, suggesting the big boys are now net buyers.
SJM options aren’t that liquid, so I suggest buying shares outright if you think the new uptrend sticks.
Papa John’s (PZZA)
Papa John’s (NASDAQ:PZZA) rounds out today’s tasty trio with a bull flag pattern. Like SJM, it too has been brought low in recent years. But this year’s rebound looks promising. PZZA stock is up 28% year-to-date and sits above all major moving averages.
The increasing momentum seen during its latest upswing coupled with multiple accumulation days also has me leaning in favor of buyers. Rather than purchasing the stock now, however, I suggest waiting to see if we can clear the $54 resistance zone. The descending trendline that has defined its downtrend since late-2016 rests in this area and needs to be taken out before the long-term chart is a buy.
As of this writing, Tyler Craig didn’t hold positions in any of the aforementioned securities. Check out his recently released Bear Market Survival Guide to learn how to defend your portfolio against market volatility.