This column was originally published on RealMoney on Oct. 17 at 1:07 p.m. EDT. It's being republished as a bonus for TheStreet.com readers.
How often do you eat fast food?
Let's be honest here.
Current sales data indicate our appetite for these unhealthy delights is still growing.
That's bad news for our waistlines, but it's great news for investors seeking reliable profits.
Monday's column, I examined the broad growth opportunities in Asia that should provide considerable upside for the industry.
Today I'll follow up with six more fast-food stocks that could fatten up your portfolio in the fourth quarter.
rallied to an all-time high at $24.03 in March 2005, pulled back in a deep correction, found support in the upper teens and started a quick recovery back toward its high.
It returned to this level seven months ago and was turned away once again.
After another downturn, the stock rallied back to resistance last Friday.
This completes a 19-month consolidation pattern that sets the stage for a strong breakout.
The recent run-up has been healthy, but the stock may pull back to absorb its gains after Wednesday's earnings release.
In the meantime, watch for it to hold above support at $22.50.
A small base there should signal an impending move to higher ground.
Chipotle Mexican Grill
came public in January, hitting $67 a few months later before pulling back with the broad market.
That decline bottomed out six weeks ago and the stock began a slow recovery that sped up after
spun off its financial interest earlier this month. This uptrend should continue in upcoming weeks.
Progress has been slow and steady since the stock broke out above base resistance at $54, but an orderly pullback might begin at any time. That decline should offer a good buying opportunity if it drops into the gap between $51.60 and $52.50. Accumulation is very strong on this issue, supporting a rally to the May high by the year's end.
has been a curious underperformer. It came public to great fanfare in May, but the stock has yet to attract active buying interest. It topped out at $19.45 just a few weeks after the offering and dropped into a sideways pattern that has persisted while its peers are hitting multiyear highs.
What will it take for this issue to show signs of life? Watch the IPO price at $18. The stock is still trading below the number, so original investors still hold losing positions. It recently tried to mount this level but was turned away quickly. A successful effort will set off bull signals, perhaps lifting the stock into and through this year's highs.
Jack in the Box
may not cook my favorite burgers, but they do have the funniest commercials. Foot-in-the-mouth, pumpkin-headed Jack is the perfect icon for this venerable chain. His ultra-big head must be moving product these days, because the stock is trading at an all-time high in a steady uptrend that could persist for months.
The latest leg of the rally began in August when the stock broke out above three-month resistance. It has made steady progress since then and is trading above $55, but it's tough to buy the stock here because there have been few pullbacks in the last two months. That might change if there's a broad consolidation in this hot October market.
runs the popular Carl's Jr. and Hardee's chains. The stock rallied back to April resistance at $18.50 and gapped higher last week on heavy volume after announcing a buyback program. The good news continued Monday when the company reported strong year-over-year sales results.
The stock is now tackling longer-term resistance between $20 and $30. While this may slow progress in the short term, the dynamics are in place for it to remount this level in the next three to six months. The best entry opportunity for interested traders and investors will come if it rolls over to fill last week's breakout gap.
is a fast-food success story, taking customers away from rivals
and Pizza Hut. The stock rallied to a high of $36 in January and dropped into a sideways pattern. It returned to that level in April and again last month. It has pushed above resistance but shows little evidence of upward momentum.
Note the congestion pattern last month. Relative strength turned higher, suggesting the stock is getting comfortable with current levels. But a strong uptrend might have to wait for quarterly earnings, which will be reported on Oct. 31. Good results could provide the catalyst for a solid run through $40 before year-end.
At the time of publication, Farley held none of the stocks mentioned, although holdings can change at any time.
Farley is a professional trader and author of
The Master Swing Trader
. Farley also runs a Web site called HardRightEdge.com, an online resource for trading education, technical analysis and short-term investment strategies. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Farley appreciates your feedback;
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