Markets rebounded strongly Monday to kick off a new week and was the second day of 1% moves for the benchmarks. In our opening paragraph last Thursday we discussed how the lack of volatility was a bullish development. Contracting volatility begets expanded volatility and perhaps we are in for a period of it, especially with the bulk of earnings season upon us. There seems to be a tug of war playing out at the moment and will be interesting to see how it plays out. The trend is your friend until it is reversed so for the time being err on the side of bullish. The advance Monday was broad with all ten major S&P sectors finishing in the green. Reviewing charts over the weekend one group we noticed that has been slipping, or having trouble with digestion has been the restaurant group, pun intended. Names like FRGI fell almost 5% in very active trade Friday losing the round 60 handle and falling further beneath its 50 day SMA. PZZA looks interesting here as it diets beneath its own 50 day SMA. It has been finding support at the 60 number and a drop beneath could be bearish, but a move back above takes out an appetizing, bullish inverse head and shoulders pattern. Peyton Manning I am sure is watching closely. Below is the chart of another casual diner PLKI exactly how it was examined in our Tuesday 3/24 Game Plan. It is now on a current 3 week slide.
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