With McDonalds (NYSE: MCD) just a day off major, long-term highs, I thought it might be worth looking around the stock market for the shares of other, albeit lesser, fast food companies that might also be due for – if not right smack in the middle of – short-term pullbacks. Here’s a look at what I found.
Shares of Buffalo Wild Wings (NASDAQ: BWLD) have sold-off for seven out of the past eight trading days, and have spent an entire week in technically oversold territory above the 200-day moving average. The selling in BWLD has earned the stock a short-term positive edge of more than 1%.
BWLD rallied to new, yearly highs at the end of the month in December, and the selling in the stock over the past several days continues to represent traders and investors taking profits and locking in gains in the wake of the stock’s impressive 2011 run. Should this profit-taking intensify, and perhaps even descend to the level of panic selling as those traders and investors who arrived late to the Buffalo Wild Wings stock party start working about being the last ones to leave, the likelihood of BWLD earning even larger, short-term edges would be strong.
The Wendy’s Company (NYSE: WEN) has pulled back for three days in a row, setting new, short-term lows for the past two sessions in a row. Monday’s lower finish, sending WEN lower by more than 2%, marks the second time the stock has traded in oversold territory above the 200-day moving average in a week. Wendy’s last three-day slide was in mid-December, and the stock closed higher by more than 5% in just five days afterwards.
With a positive, short-term edge of more than one and a half percent, shares of Domino’s Pizza (NYSE: DPZ) will no doubt attract attention from short-term traders looking to buy weakness in bull market territory.
DPZ has finished lower for three days in a row, and is down six out of the past seven days for a combined correction of more than nine percent. Trading at its lowest level since late November, shares of Domino’s Pizza closed at their lowest levels of the session on Monday, hinting strongly that sellers will have the advantage when trading begins Tuesday morning.
Be sure to read our latest column from 7 Stocks You Need to Know: Volatility and Visa’s New High.
David Penn is Editor in Chief of TradingMarkets.com.