By Bryan McCormick
Yum Brands (YUM) is showing some interesting technical aspects ahead of its earnings report tomorrow.
It may not look like much, given that the shares have been range-bound and moving sideways for nearly a year. As you can see by the red resistance and green support lines in the daily chart below, the stock has moved in a wide range from $32.50 to $36.50, for the most part, at the highs.
The very stable range tells us that investors and traders are waiting for new information on the international casual-dining company before deciding which way they will push the stock. (Click to enlarge)
Notice that, unlike many stocks back in March of last year, the shares went nearly straight up in a very short span and then sideways for an extended period. In essence, the market repriced the shares very quickly, discounting a better future.
Thereafter, the stock didn't drift too far out of range. The July and October earnings seasons last year did not change the opinion of traders or investors.
And that really becomes the set-up for a potentially larger move this time around. If there is a surprise, with strong news, good or bad, the chances of seeing the range resolved one way or another tends to increase the longer it has been in existence.
On the weekly chart above, I just wanted to show that the stock has something of a history of moving sideways, with quite sudden repricings. We could be looking at just such an event tomorrow.
(Chart data provided by Thomson Reuters)
No comments:
Post a Comment