Strong Stock YUM Brands Breaks to New Highs

Jul 14, 2016: 11:15 AM CST

We look for “strong stocks getting stronger” because they offer better chances of profiting from joining into the strong trend.

Take a look at this week’s post on the “Top Ten Stocks Breaking to New 52-Week Highs” for more info.

YUM! Brands is such a stock that power-gapped higher this morning after its earnings report post-market close yesterday.

Let’s chart the weekly trend and highlight today’s  gap into a key target as the “strong stock strengthened.”

The Weekly Chart highlights a flat to rising pattern with price reversing – on positive divergences – off the $66.00 per share pivot in early 2016.

From there a strong uptrend propelled price through the “Open Air” pocket into the current target high near $90.00 per share – the 2015 high.

The “air is thin” at this level as evidenced by the long upper candle shadows suggesting a strong resistance into this zone.

Let’s drop down to the Daily Chart to pinpoint today’s gap into our $90.00 upper target zone:

A short-term sideways rectangle pattern developed between $78.00 and $84.00 since May.

We saw a breakout beyond $84.00 hold for four closes ahead of today’s upside earnings gap.

Price initially rallied through $90.00 per share but buyers are logically taking well-deserved profits (selling) as short-sellers (bears) may be stepping in for an aggressive price reversal expectation into resistance.

For now, focus on the $90.00 to $92.00 per share level as resistance and trade the immediate departure from this key price level.

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Corey Rosenbloom, CMT

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1 Comment

One Response to “Strong Stock YUM Brands Breaks to New Highs”

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