Don't Ignore This Chart!

Darden Restaurants (DRI) Hits New Highs


Darden Restaurants (DRI) stroked a new high on Thursday's down day. The owner of Capital Grille, LongHorn Steakhouse and Eddie V's is continuing to outperform. The chart has a few nice traits on it that deserve mention. The SCTR has been in the top 25% for most of the 18 months shown. This continuous high level of performance is nice to see. The Relative Strength in purple has been trending up the last 6 weeks. Darden broke out to new highs this week and we can see it is really starting to pull away from the $64 level which was meaningful resistance through the last year. After surging above in March, the stock came back and hovered under $64 for a month. Now it is breaking out to new highs again. During the rough market patches in October and January, the stock pulled back meaningfully with a correction in January/ February of 20% highlighted with the blue box.

The MACD is currently rolling over so investors might get a pullback in an otherwise strong trending stock. This rollover in momentum hints at waiting a few weeks for a reservation with the 'Buy' button, but it should definitely be on a watch list for an opportunistic place to buy.

The strong historical action on the SCTR suggests Darden is very good at continuously outperforming the large-cap peer group which is a hard trait to find in this market of continuous sector rotation.

Good trading,
Greg Schnell, CMT, MFTA

Greg Schnell
About the author: , CMT, is a Senior Technical Analyst at specializing in intermarket and commodities analysis. He is also the co-author of Stock Charts For Dummies (Wiley, 2018). Based in Calgary, Greg is a board member of the Canadian Society of Technical Analysts (CSTA) and the chairman of the CSTA Calgary chapter. He is an active member of both the CMT Association and the International Federation of Technical Analysts (IFTA). Learn More
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