As the stock market has continued to advance a good sign has been breakouts. They have come from the double bottom and cup variety for the most part, but most important is to monitor their progress POST breakout. The best ones will work out right away, and a big red flag are ones that fail very quickly afterwards. Below are a couple of examples.
The casual dining space has been in the spotlight with CMG’s 40 handle drop post earnings on 10/21. There have been some bright spots as well with BJRI gaining almost 12% last Friday after reporting. Now we look at CHUY, a name that looked fantastic taking out a double bottom trigger of 32.39 on 10/9 on gigantic volume, often an excellent sign. However in rapid fashion the move failed as it traded below the breakout pivot just 3 sessions later. The move lower accelerated and the last 2 weeks CLOSED near the lows of the weekly range and Monday fell almost another 4%. Perhaps one can enter at the 200 day SMA.