Modern Casual Diner Safe Harbors?
Since roughly election day the has been a trio of restaurants that have provided some more “protection” than McDonald’s, the previously obvious choice. The chart below shows the trifecta of EAT, DRI, and YUM providing more comfort over the last 100 days. Yum Brands has a nice look to it and is well above its 50-day and 200-day SMAs but with a wobbly overall environment would look for this to potentially form a double bottom with a low in the 149-150 area, and notice how it has outperformed cousin YUMC in China which speaks volumes. DRI will be interesting to see if the very round 200 number, resistance 4 prior times since February will turn into support after the 4% gap up Monday. EAT is the weakest of the three, down 23% from its most recent 52 week highs while DRI and YUM are 3 and 5% off their annual peaks, but could be potentially setting up a future double bottom base if it can climb above its 50 day SMA in the near term. Treat this more as a monitoring exercise as opposed to putting on new positions in this fragile market. Names that weather the storm best usually prosper the most when the group cathces its footing.