There Must Be Something in the Sauce – Pizza! Pizza!
- Posted by Greg Harmon
- on December 17th, 2012
Domino’s Pizza, $DPZ, is making new all time highs and with rising trend support and a bullish Relative Strength Index (RSI) looks to continue. But there truly must be something in the sauce because two other pizza chains, Papa Johns, $PZZA, and Pizza Inn, $PZZI are also looking strong. In fact these two may be ready for a big move.
Papa Johns, $PZZA
Papa Johns, $PZZA, fell out of an expanding wedge in mid November but found footing at teh 200 day Simple Moving Average (SMA). Since then it rose back near the top of that wedge and has consolidated in a bull flag. Monday it probed out of the top of the flag and over the outsized volume by price bar at 53. It has a bullish RSI and a Moving Average Convergence Divergence indicator (MACD) that is positive to support a push up. A move over the top of the flag and then through resistance at 54 gives a Measured Move to 60 and new all time highs.
Pizza Inn, $PZZI
Pizza Inn, $PZZI, is not near all time highs. It lived life as a momentum darling late in 2011 and suffered the fate of momentum traders fleeing the scene the first half of this year. But recently it is showing signs of a big move as well. Consolidating for over 2 weeks in a very narrow range after a move off of the 2.65 level gives it a Measured Move higher to 4.15, over the August spike. This would also continue the series of higher lows and higher highs, very bullish. So maybe there is something in the sauce. Pizza, Pizza!
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Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
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