Week Ending 13 May 2016 Free Simple Trading Stalk Candidate

This week’s Free Simple Trading Stalk Candidate is YUM! Brands. According to it’s Yahoo Finance Profile,

YUM! Brands, Inc., through its subsidiaries, operates quick service restaurants. It operates in four segments: YUM China, the KFC Division, the Pizza Hut Division, and the Taco Bell Division. The company develops, operates, franchises, and licenses a system of restaurants, which prepare, package, and sell various food items. As of April 21, 2016, it operated approximately 43,000 restaurants in approximately 130 countries and territories primarily under the KFC, Pizza Hut, and Taco Bell brands, which specialize in chicken, pizza, and Mexican-style food categories.

The charts are as follows…

Weekly

YUM W 13 May 2016

Daily

YUM D 13 May 2016

Metrics:

52 Week Hi: $95.90

52 Week Lo: $64.58

TAOST Ultimate Stop: $59.60

Average Daily Volume: 3,079,993 Shares/Day

Optionable: Yes; Weekly and LEAPS available.

Next Earnings Report Date: 12 July 2016

Trade Thesis:

YUM! felt the pain inflicted on retailers this week as big names like Macy’s, Gap, Ralph Lauren, Kohl’s, Nordstrom and J.C. Penney all disappointed.  There’s just 1 big difference… YUM! sells a staple (food)… In fact, YUM!’s brands are far more utilitarian in nature than luxury, thus it might be that their sales rose at the expense of clothing retail and higher end fast casual food chains.

At any rate, long entries should be stalked prior to the company’s report date on 12 July with appropriate stops as long as price remains above $59.60.  A breach of $59.60 will remove YUM from long stalk consideration.