Many have been talking about the rotation out of software recently, but some casual dining leaders took a punch to the gut recently too, pun intended. Mild hits were seen from MCD which sliced its 50 day SMA in big volume Tuesday, the largest daily trade since 2/1. It sits just 4% off most recent 52 week highs, but one wants to watch how that responds when touching that line if it occurs. WEN plunged more than 10% on 9/10, and CMG took a 6% haircut the same session. QSR is looking at a potential back to back weekly fall depending on Fridays CLOSE, and would be the first time that has happened since the beginning of March. WING is a rapid 18% off its most recent yearly peak. My opinion is the nausea should be short lived. Give the generals the benefit of the doubt until it is obvious it is no longer warranted. One to watch going forward could be PZZA. Below is the ratio chart comparing to former leader DPZ. Could be a new sheriff in town.
Patience Bears Fruit:
It is always important to build a watch list. One can never be too prepared. Three weeks back when AAPL was still 15 handles below a bullish ascending triangle pivot, we took some flack that we were way premature. There was no trade recommendation, just an illustration of what was possible. And the implications this particular name has on overall markets is huge. Many consider it a proxy for the Nasdaq, but many look at Apple not only as a technology company, but a consumer name. Its move into streaming content this week, was further evidence of that, and of course its watch and phones are plays on shoppers. The triangle has been taken out and notice how the 50 day SMA has held since the beginning of June. The round 200 figure provided cushion as well. This move can just be getting started into year end, although a moderate bearish counterattack candle was recorded Thursday.
The footwear groups has witnessed some bifurcation within. DECK was unable to get above the round 180 number, in a pattern that resembled a bull flag, but once time carries on it made the formation failure prone. WWW is still in bear market mode, and below we take a look at the chart of SKX and how it appeared in our 8/19 Consumer Note. It did trade between the round 30-40 numbers recently, and a quick recapture of the 200 day in late August improved the complexion. The last 2 weeks rocketed 18%, and this week is following through higher by another 5.5%. The one caveat here would be the V shaped cup base that is now under construction. One would prefer to see a more rounded look, and a little more time to form.