Domino’s Pizza ( $DPZ) has been one of the leaders in the Restaurant Group rising over 50% just since November 2017.
Near-term Technical Outlook
Recently, the stock put in a divergent high ( higher prices with lower momentum and RSI ) and now looks to have put in a double top at $255 on Friday May 25. Today the stock is down about 2% and is testing the $245 mark trading below the trend line of the rising wedge. The RSI shown in the top panel appears to be headed below 50 and the momentum, while still positive as shown by the PPO indicator, is heading lower.
Another thing I look at in sizing up a particular instrument is the relative performance to SPY and its industry group. These metrics are shown in the lower 3 panels of my chart. You can see the DPZ has ever so slightly begun to lose its relative performance edge vs both SPY and the Restaurant group. Still strong, just beginning to weaken a little.
Short Term Outlook
I am looking for continued weakness in Domino’s in the near term. Initial Support comes in around $240, then another more solid level at $235. I own a small position in DPZ Jun $240 puts
Chart Link : $DPZ Daily http://schrts.co/1LdG3C