Can Restaurants Go Further?

When I look through the bars and restaurants, I don't see too many charts I like as new investments right now. Most of the charts have extended moves.

While Chipotle (CMG) fits into that extended look by being well above the February highs, the stock is breaking out of a strong consolidation. CMG has just surpassed the prior highs, and the PPO momentum indicator is turning up again. I like the breakout with the momentum improving. The stock has had a high SCTR ranking for years after some health safety issues. Those who had the courage to buy back in the 4th quarter of 2017 and expect management to right the ship have been handsomely rewarded. For the most part, the stock has moved sideways in the last six months and has started to accelerate higher.

The second stock was another investor-damaging plunge by a surprising situation that crushed most investors. Now the stock appears to be working out of the base that was built after the carnage. The stock is Luckin' Coffee (LKNCY), the Starbucks (SBUX) of China. In early December, it broke out of the base above $6.80. After consolidating for 6 weeks, the stock is making its next leg higher.

The stock has had little time with a positive PPO momentum indicator, but now it looks on its way.

Two special situations, and one is well advanced, three years on its way after a plummeting painful drop. The second one is just beginning to climb out of the hole, with a road higher, for those with patience for the march.

I will be presenting on the Your Daily Five show on StockCharts TV this Thursday, January 28th. I'll have some more ideas there.