We haven't had the urge to check out Papa John's (PZZA) - Get Reportfor some time, and while we were negative and right in late 2015, we missed the double in 2016. The stock was downgraded today by TheStreet's quantitative service.
We're hungry and back looking at the latest charts and indicators. Is the long side appealing or should we have something else for dinner -- or an investment?
In this daily bar chart of PZZA, below, we can see a downtrend since December. Prices have spent much of the past 11 months below the declining 50-day moving average line. The slope of the 200-day moving average line turned lower in late June. Sellers of PZZA have been more aggressive the past year, with a declining On-Balance-Volume (OBV) line telling us that trading volume has been heavier on days when PZZA has closed lower.
In the lower panel is the 12-day momentum study, and while the decline has slowed in October compared to September, this is not a strong-enough bullish divergence to anticipate much of a bounce.
In this weekly bar chart of PZZA, below, we can see prices are below the declining 40-week moving average line. The weekly OBV line shows a "triple top" since May and has roughly moved up and down with the price action and looks better than the price action. The trend-following Moving Average Convergence Divergence (MACD) oscillator has been in a bearish mode below the zero line since early June. The two moving averages that make up this indicator are not narrowing, so a cover-shorts signal is not close.
In this Point and Figure chart of PZZA, below, we can see the downtrend and the not-far-away price target of $62.58. This price target may not stop the decline and the chart shows support in the $57.50-$53 area.
Bottom line: Keep this stock in the oven as PZZA is not showing us any firm signs of a lasting low or bottom.
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However, please note that our Quant Ratings service assesses stocks using a proprietary computer model that runs a variety of factors through quantitative and technical analysis. Ratings do not necessarily reflect the opinions of Jim Cramer or other columnists, who may use different criteria to grade stocks.
This column originally appeared at 11:15 a.m. ET today on Real Money, our premium site for active traders. Click here to get great columns like this from Bruce Kamich, Jim Cramer and other writers even earlier in the trading day.
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