This Restaurant Play Will Feed Your Portfolio
Gregory W. Harmon | May 02, 2016 02:35PM ET
Grubhub (NYSE:GRUB) is a genius idea for big cities with tons of restaurants. It connects diners and restaurants in regions with high demand via online menus and delivery sevices.
The stock has had some issues though. After IPOing in March, 2014 it moved higher to a peak in April 2015. Since then it has been all downhill for GRUB, which finally found a bottom at the end of January -- a full $8 below its IPO price of $26. Now it is rising and is back at its IPO price.
As it carved out a bottom, the price action traced out an Inverse Head-and-Shoulders pattern. The price cleared the neckline April 14, giving a price objective of at least 32.70. The pause in consolidation the past two weeks gives a solid trade opportunity.
This bull flag made a doji on Friday -- an indecision candle -- and was confirming to the upside on Monday. The momentum indicators are bullish with the RSI rising and the MACD avoiding a cross down. It also looks like it will print a bullish Golden Cross in about two weeks.
Maybe it's time to order some GrubHub.
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