With the overall downtrend of crude, gasoline prices have benefitted many sectors. Consumer discretionary names have come back nicely as witnessed by ULTA, URBN and BKE which we wrote about recently here. Other groups which have risen are the casual diners as the excess cash saved has been used to dine at those locations. BOJA rose more than 23% Friday after an earnings report (it still sits 35% off 52 week highs however). MCD, PNRA and cake have been real leaders. Below we look at a couple names, JACK and EAT, that have not kept pace with the group and showed poor relative strength this week falling 2.9 and 6% respectively.

In our Monday 2/29 Game Plan this is how we looked at JACK. The stock was having issues with the round 70 number which was sturdy support 3 times since last November. On 3/4 it recorded its only CLOSE above the 70 number and Friday produced a bullish hammer after a 4 session losing streak. Last Wednesday and Thursday fell a combined 4% with both days coming in almost double average daily volume. It now rests 5% below the recommended short entry.

Stocks to be viewed as shorting opportunities are JACK. JACK was a former best of breed casual dining play lower by 10% YTD and 29% over last one year period and sports a dividend yield of 1.7%. Earnings have been on the weak side with losses of 16.2, 6.2 and 4.3% on 2/18, 8/6 and 5/14 and a gain of 5.8% on 11/18. This week the stock rose the last 4 days of the week after a bullish engulfing candle on Tuesday. Bulls can point to the fact that JACK found support at a prior cup base breakout trigger of 63 taken out the week ending 9/12/14. However Friday recorded a bearish doji candle at the round 70 number (notice stock stopped at 99.99 on 3/25/15) which also happened to be the breakdown from a descending triangle. Short here.

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