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Domino’s Pizza Stock Fell, Moved Into the Green. Where From Here?

Domino's Pizza stock opened lower on the day and quickly moved into the green. That's a bullish sign. Here's how to trade it.

Domino’s Pizza  (DPZ) - Get Domino's Pizza, Inc. Report opened lower, off as much as 4.3% in the opening minutes of Thursday’s session.

Those losses didn’t last long, though, and if investors didn’t know where to look, they very likely missed this dip-buying opportunity.

Still and all, there ways to navigate the stock after the Ann Arbor, Mich., chain reported earnings.

The selloff in the opening minutes wasn’t surprising as Domino’s missed on revenue expectations. But its earnings beat analysts' estimates.

The news also came on a busy morning, with a number of banks reporting earnings, like Morgan Stanley  (MS) - Get Morgan Stanley (MS) Report and Wells Fargo  (WFC) - Get Wells Fargo & Company Report.

And to see a stock rebound from negative news is very encouraging.

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Trading Domino’s Pizza Stock

Daily chart of Domino's Pizza stock.

Daily chart of Domino's Pizza stock.

If the bulls weren’t looking at multiple time frames, they likely weren’t looking at the 10-month moving average. 

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After opening lower on the day, Domino’s stock traded down to this moving average and then bounced hard.

Instead, many investors were likely looking at the 200-day moving average.

The ensuing rebound took the stock back not only over the September and October lows but back over the 10-day and 21-day moving averages.

Today’s action gives us a bullish engulfing candle, where Thursday’s trading range is fully engulfing Wednesday’s range. If the stock can rotate weekly-up over $491.18, it will be even better.

It’s also important to point out July 27, the date of the most recent big spike in Domino’s stock, which came on heavy volume. 

We’re filling into the bottom of that candle now but have also taken out the prior pre-earnings low.

From here, let’s see if we can get a weekly-up push and clear $492 — putting Domino’s over its key weekly moving averages as well.

In that scenario, it puts the 50-day moving average and downtrend resistance in play (blue line). That’s followed by the 61.8% retracement up near $513, then the $525 level.

On the downside, I don’t want to see the stock lose the 10-day and 21-day moving averages. If it does, it opens up the $475 area, then the key $470 level.