0L5R trade ideas
Fast food does not mean fast money!Who like Shake Shack burger ? Not for me as I am not quite into fast food with the occasional purchase of McDonald's fries. Now that I have remove meat from my diet, there are even less reasons to visit a fast food restaurant.
Despite there are so many fast food chain operators here in Singapore, it seems like more new players are coming into our little city. And it is no wonder (imo) that people are getting lazier and having a bigger waist line from consuming all these unhealthy food. Yeah, right, you can put the blame on Covid-19 and say you can't head out to the park to walk or run. So , to comfort yourself over a nice episode of Netflix movies, why not order in a Shake Shack burger ? Now, with all these food delivery companies available, who needs to get out and queue and spend time on transportation ?
Anyway, from the chart, this stock is facing strong resistance at 71.96 level (read my comments in the chart) and if 63.89 support can't hold, we are likely to see it heading south to 57.16.
For a stock that hits its peak at 100+ 5 years ago and hit a low of 30, we are now in the mid range of 60+. Would another 40 bucks up move be sufficient to entice you ? Risks, the worst is it falls back to 30. So , there you go, the risk/reward isn't that enticing and there are other operators that I like better.
Head and Shoulders on $SHAKWe can see a head and shoulders forming on $SHAK on the 1D, but it is much clearer on the 4H. Volume has been at a relative low since the first shoulder, and significantly lower at the head than the first shoulder. There is an explosion of volume on the recent red candle, and a bear flag forming on the 1H.
Target: $32.22
Entry: $46.65
Stop Loss: $50.94
Bull FlagPossible Targets 2 88.8 to 95.5
A bull flag is a technical continuation pattern which can be observed in stocks with strong uptrends. The pattern takes shape when the stock retraces by going sideways (or by slowly declining) after an initial big rise in price.
A bull Flag only appears in an uptrend
No rising wedges
NV is high
Short interest mediocre
Not a recommendation
SHAK - 10.08% Potential Profit - Ascending TriangleAscending Triangle breaking out after a 6-month uptrend.
Aggressive buyer presence in the past month. I will try to make the most of the recent drop and play the bounce. However, this is a highly-sensitive pandemic stock, therefore I will allocate 35% less capital than usual.
- Target Entry $65.20 (Buy Limit) or $66.50 (Buy Stop)
- Target Stop Loss $64.57
- Target Exit $72.50
About me
- P/L September +33.74% | August: +232.32% | Historical Win Ratio 70.59% | No Trades without Analysis
- Note that I tend to adjust stop losses in order to secure profits early and preserve capital. This means that the target price is going to be achieved as long as there are no strong pullbacks that trigger my new adjusted stop loss
SHACK: A Technical and Fundamental Approach to Shake ShackIf you like this analysis, please make sure to like the post!
I would also appreciate it if you could leave a comment below with some original insight.
In this analysis, I will be explaining my on views on the high-end burger brand, Shake Shack (SHAK).
I'll be exploring the technicals and financials of the stock, as well as the overall business model of the company.
Technicals
- Shake Shack's price history demonstrates a phase of immense bullish momentum
- It formed a textbook cup and handle pattern, in which the breakout led to the formation of all time highs
- However, after topping out, in November 2019, Shake Shack announced that it would temporarily shutter locations for upgrades in 2020
- This led to a significant drop with the addition of the Corona virus (COVID-19) pandemic, too severe to the point where the 5 year trend line support was tested.
- As it was technically oversold, stock prices bounced off support, forming a reverse head and shoulders pattern
- Based on the current technical setup, we could see the stock rally towards its previous all time high levels, completing the reversal pattern
Financials
- Shake Shack is one of the businesses that has been hit hard by the Corona virus (COVID-19) pandemic
- Due to lockdowns initiated by the government, their earnings for the second quarter of 2020 were at a net loss
- In terms of financials, the major issue is that they are short in cash
- With $112m in cash, they are spending $1.5m every week to cover fixed costs such as rent
- They have also laid off hundreds of employees and sold their stocks to secure more cash
- Due to their being a 2 Billion Dollar company, Shake Shack did not quality for the government's payroll program, and thus could not receive $10m in aid
- Currently, only over half of Shake Shack's licensed global units remain open, limiting Shake Shack's cash flow
- However, it's also important to note that they have shown a 25% growth in revenue year over year for the past five years.
Business Model
- Nevertheless, Shake Shack's Business model cannot be undermined.
- They have positioned themselves as a high-end burger place, unlike other fast food restaurants such as Mc Donald's (MCD)
- This is a strength for Shake Shack during the Corona Virus Pandemic, as people seek to purchase luxurious goods during hard times.
- As people can't eat out as frequently as they used to, when they do decide to eat out, they get an expensive meal.
- Just as luxurious goods are high in demand during recessions, Shake Shack's quality burgers will continue to be in demand during the pandemic.
- It's just the severity of the situation, and lockdowns initiated by the government, that prevent people from visiting Shake Shack stores as frequently as they used to.
- Shake Shack's management model is highly effective and efficient, providing the customer not only a pleasant experience, but also consistently delicious burgers through their meticulous quality control.
- This allows Shake Shack to scale tremendously over time, just as Mc Donald's has managed to do.
- They have great brand loyalty with a huge customer return rate, and the engaging ambiance they provide at their restaurants is what sets them apart from their competitors.
Conclusion
Shake Shack is a extremely solid company, struggling during hard times. However, it's important to note that SHACK is an overlooked growth stock, with immense potential for scalability. Given that the virus ends some time within 2021, we could expect a fast recovery, and huge continued growth from this company, as its fundamental business model continues to remain solid.
SHAK - Cup with or without handle?SHAK is looking to break the rim of a Cup pattern @ 63.80. A "cup & handle" pattern that formed after a prior uptrend is a trend "continuation" pattern.
However we are seeing only a cup without a handlde at this point. 2 things can happen: this break up can fail and it began to form a "handle" pattern instead. In any case I would long the break of the rim (and if this fail and handle forms, long the breakup again when that happens).
A successful breakup should bring us to the target of at least 78.50-81
Disclaimer: This is just my own analysis and opinion for discussion and is not a trade advice. Kindly do your own due diligence and trade according to your own risk tolerance. Thank you.
SHAK - 28.45% Profit Potential - Bullish PennantBullish Pennant formed out of a price correction that interrupted a 5-month uptrend. Positive COVID vaccine news will act in our favor.
Target price set at corridor resistance line bounce (May and Jun points).
Note that I have set a very tight stop loss (right below today's VWAP) because I have a few trades going on. However, given the upside, you might want to consider giving the Stop Loss a bit more breathing.
- Strong Uptrend
- RSI and STOCH well above 50
- MACD well above Signal
Suggested Entry $59.16
Suggested Stop Loss $57.65
Target price $76.36
Note that I tend to adjust stop losses in order to secure profits early and preserve capital. This means that the target price is going to be achieved as long as there are no strong pullbacks that trigger my new adjusted stop loss.
Double Bottom Trendline and 200ma break with Upgrade. SHAKDucks are all in a row!
-Wedbush upgraded price target of $77.
Analyst notes SHAK is 'even more attractive' post-COVID position and is still a "preeminent" growth story.
-Internationally, SHAK is seeing great demand in places like China, where countries have COVID under control.
-SHAK EPS is expected to grow over a 100% year over year.
-Technically price is above the 20 and 50 daily ma and on the verge of breaking the 200 daily ma.
-bullish volume spike
-finally breaking the downward sloping trend line.
- Price is clearly be consolidating between 50-55 range
-Price has also made a double bottom w/ Stoch divergence.
$SHAK Shake Shack on the Monday Menu
Potential long entry now stock has gained 200ma
RSI in strong uptrend since post earnings selloff.
Optimistic upside target to $67.00 where the
gap open may act as strong resistance
Long term downtrend has been back tested so bullish
in the longer term.
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BIG Potential for SHAKE SHACK DailyHey investors, SHAKE SHACK is in a bullish continuation with a lower purchase volume, it will turn around at the beginning of the session see TIMEFRAME 5 Min. There is a great possibility of going in the direction of the next high, to see close the bullish gap and to be on the low of the next bearish candle.
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