As Darden Restaurants Prepares Earnings, I'm Not Ready to Order
The owner of Olive Garden and other chains will report earnings on Thursday.
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Darden Restaurants DRI, which owns Olive Garden, LongHorn Steakhouse, Yard House, The Capital Grille, among other restaurant chains, is slated to report its fiscal fourth-quarter earnings report next Thursday morning.
Sell-side firms have been cutting their price targets for the company, so let's check out the charts of DRI and the reviews on Yelp YELP.
In this daily bar chart of DRI, below, I can see that prices made a peak in March. The shares trade below the declining 50-day moving average line and below the declining 200-day moving average line.
The On-Balance-Volume (OBV) line has been weak since early April. The Moving Average Convergence Divergence (MACD) oscillator has been below the zero line since early April.
In the weekly Japanese candlestick chart of DRI, below, I can see a potential double-top formation for DRI. Prices have failed twice in the $170-$175 area before turning lower. DRI trades below the declining 40-week moving average line.
The OBV line has been weak the past three plus months. The MACD oscillator is below the zero line in positive territory.
In this daily Point and Figure chart of DRI, below, I can see a downside price target in the $129 area.
In this weekly Point and Figure chart of DRI, below, I can see the same $129 price target.
Bottom-line strategy: I really need to drive past the parking lot of an Olive Garden over this weekend to get a "channel check" but for now the less-than-appetizing charts tell me a story of weakening business.
Avoid the long side of DRI for now.
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