Last week, the Minneapolis, MN-based restaurant chain posted earnings that met analysts' expectations for the 2016 third quarter.
As the consumer is such a large part of the economy, it makes sense to watch the restaurant group very closely for signs of health or weakness. Wage growth over the years has been anemic, but expenses such as Obamacare have been rising, taking discretionary funds out of our pockets.
We can see the negative effect in names like Chipotle (CMG:NYSE), Panera Bread (PNRA:NYSE) and even McDonald's (MCD:NYSE) in the restaurant sector, but the poster child for beatings has been Buffalo Wild Wings (BWLD:NYSE) -- but only until recently.
We see the waterfall decline that started in summer, with a dramatic decline on heavy turnover. That massive move in July was fully repealed by early October, and then some. Indicators and price trends were sharply bearish, but last week's performance may be a game changer.
We see good turnover (buyers) last week post earnings -- that is where we see the gap in the chart. Relative strength is improving; the slope is quite steep (which is positive).