Because consumers are major drivers of the US economy, it makes sense to watch the restaurant group very closely for signs of overall economic health or weakness. Wage growth over the years has been anemic, while rising expenses (particularly healthcare, college tuition and housing in some parts of the country) have been soaking up discretionary spending. You can see the negative effect it’s had on big names in the restaurant sector like Chipotle, Panera Bread and even McDonalds. Buffalo Wild Wings had been hit particularly hard – until recently.
On the chart below, you can see the waterfall-like decline that started over the summer on heavy turnover. That massive downward move in July was fully repealed by early October – and then some. Indicators and price trends had become sharply bearish, but last week’s performance may be a game changer. Buyers were out last week post earnings; you can see the good turnover at the gap in the chart. Relative strength is improving, and the slope is quite steep (which is positive).
The MACD is on a modest buy but with resistance just ahead at the 200 ma and the 10 ma around 150, Buffalo Wild Wings is not out of the woods yet. It may stall or perhaps lunge through that level. If it pauses at overbought, take it as a good sign to get on board.
Buffalo Wild Wings (Nasdaq: BWLD) Video Chart Analysis
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About Buffalo Wild Wings
Buffalo Wild Wings, Inc. engages in the ownership, operation, and franchise of restaurants worldwide. The companys restaurants provide various food products and alcoholic beverages. As of October 26, 2016, it had approximately 1,200 Buffalo Wild Wings restaurants. The company was founded in 1982 and is headquartered in Minneapolis, Minnesota.