Cracker Barrel Old Country Store
Things are looking a whole lot more promising for another chain based in the south, Cracker Barrel Old Country Store ( CBRL). This small-cap restaurant stock has been on a tear in 2013, rallying more than 54% since the calendar flipped over to January. And now, a bullish price setup points to even more upside in the second half of the year.
CBRL is currently forming an ascending triangle pattern, a price setup formed by horizontal resistance above shares at $102, and uptrending support to the downside. Basically, as CBRL bounces in between those two technical price levels, it's getting squeezed closer and closer to a breakout above that $102 price ceiling. When that happens, it makes sense to be a buyer.Whenever you're looking at any technical price pattern, it's critical to think in terms of buyers and sellers. Triangles, double tops, and other price pattern names are a good quick way to explain what's going on in this stock, but they're not the reason it's tradable. Instead, it all comes down to supply and demand for shares. That resistance line at $102, for example, is a price where there is an excess of supply of shares; in other words, it's a place where sellers have been more eager to take recent gains and sell their shares than buyers are to buy. That's what makes the move above it so significant -- the breakout indicates that buyers are finally strong enough to absorb all of the excess supply above that price level. The 50-day moving average has been a stellar proxy for support on the way up. I'd put a protective stop on the other side of it.