NEW YORK (TheStreet) -- Good luck traders!
1. First let's look at Darden Restaurants, which owns and operates full-service restaurants in the U.S. and Canada under the Olive Garden, Red Lobster, LongHorn Steakhouse, Capital Grille, Yard House, Seasons 52, Bahama Breeze, Eddie V's Prime Seafood and Wildfish Seafood Grille brand names.
Darden Restaurants traded up 2.57% on Monday, closing at $47.86 per share.
- Monday's range: $46.55 - $47.94
- 52-week range: $43.56 - $54.89
- Monday's volume: 2,779,797
- 3-month average volume: 1,567,580
Darden looks good because yesterday created a two-candlestick pattern called a doji gap up, often referred to as the trader's best friend. The doji gap up is starts with a battle between the bulls and bears, thereby forming a doji. Then, the following day, price action gaps up over the previous day's close and forms a bullish candle.
Plus, yesterday's price closed over the 50-day simple moving average, piquing my interest as a rounded-bottom breakout.
Since the beginning of the current short-term bullish trend, volume increases on bullish days, which tells us there is strength behind the positive trend, and volume decreases on bear days -- meaning there's no strength.
I'd look for an entry above the 50-day simple moving average, above $47.36. Today should offer a price within yesterday's trading range. I'd set my stop at $46.88, which is the pre-gap high. Then, I'd target the 200-day simple moving average, which is only up 4%, and look to add to the position as it clears the 200. Then target the overhead resistance levels, and ultimately target the 52-week high of $54.89 -- 14.6% to the upside from yesterday's close.
Stay long until you see a confirmed sell signal or a close below the t-line.
Next up: Medidata Solutions and Zebra Technologies.