America loves breakfast, especially all-day breakfast. So maybe it was not a surprise that after reporting earnings Monday night, Denny’s (NASDAQ:DENN) stock bounced more than 7% on Tuesday. If you were holding it into earnings, congratulations. But after the long path lower and meek bounce -- followed by a long consolidation -- it's not very likely you were involved. Does the stock have more upside? It looks like it does.
The chart below shows the price action since making a top last August. It found support through January and February and moved higher. Then, two months of consolidation led up to earnings. The break of consolidation following earnings brought the price to the falling trend resistance going back to September. That may give many pause before buying.
But it also pushed the price over the 200-day SMA for the first time since October. The momentum indicators are bullish too, with the RSI bouncing off of the lower end of the bullish zone and the MACD crossing up. The Bollinger Bands® are opening to the upside too. And the Measured Move out of the consolidation looks for 11.50.
There's still the potential to hit a grand slam in this stock. Protect against the 200-day SMA and, if conservative, wait for a move over resistance to start swinging.