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Shares on Dunkin' Brands (DNKN) - Get Dunkin' Brands Group, Inc. Report have been trading lower in a descending channel for the last three months, but with a successful retest of channel support last month and a nearly 3% rally in Monday's session, they have moved above pattern resistance. The recent price action and the technical indicators are suggesting that there may be a shift underway in the direction of the intermediate term trend, which could help return it to the highs it saw earlier in the year.

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The daily chart shows the steady series of lower highs and lower lows that have defined the a $4 channel range. Last month's latest low was a 62% Fibonacci retracement of this year's current range and was followed by a sharp bounce that continued this month, taking price back up to the top end of the channel. The relative strength index and moving average convergence/divergence have crossed above their center lines, and the aroon indicator, which is designed to identify early shifts in trend, has made a bullish crossover. The money flow indications are also improving, with Chaikin money flow advancing into positive territory and the money flow index, a volume-weighted relative strength measure, crossing above its 21-period average and nearing its center line level. 

The stock rallied nearly 3% in Monday's session, taking out channel resistance and closing above $45.75, which is also the 50% retracement level of the 2015 and 2016 range. It is a long candidate at its current level using an initial stop under the 50-day moving average. The pattern price target is measured by adding the height of the channel to the breakout level, and it projects back up to the $49 area.

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This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.