Cracker Barrel Old Country Store, Inc. (CBRL) has missed the earnings per share (EPS) estimates on 2 June, but the stock rallied toward its 200-day simple moving average at $137.41 on 5 June. Cracker Barrel is a combination country restaurant and a gift shop with the southern feeling of comfort. The stores are located in many major exits along the Eisenhower Interstate Highway System in the Southeast and the Midwest.
The stock closed Monday, June 15, to $116.17, or a decrease of 24.4% year-to-date and in a bear market territory 31.7% below its Feb. 25 high to $170.19. Cracker Barrel stock is also in a bull market, with a gain of 116.7% from its March 19 low of $53.61. The stock has a P/E ratio of 19.93 without having to pay a dividend, according to the trends.
When the economy was on lockdown because of COVID-19, the foot traffic in the Cracker Barrel stores was low. What has changed on a dime as travelers returned on the roads recently. Along the I-95 corridor, the parking lots are full again.
The daily chart for Cracker Barrel
The daily chart for Cracker Barrel shows that the stock is moving laterally along the 200-day simple moving average until February. 26, when the market decline began. This is when the stock first closed below its 50 days simple moving average.
The stock then plunged to its March 19 low of $53.61. This day proved to be a key reversal as the close is above the March 18 high at $63.80. On the rebound, the stock has returned to its 50-day simple moving average, on the 29th of April.
After the decline once more, the stock has jumped to its quarterly pivot at $127.48, which could not take place on 10 June. Cracker Barrel stock failed just below its 200-day simple moving average at $137.41 on 5 June. The stock traded as low as $107.46 on 15 June, and today, the trade is between its quarterly pivot at $127.48 and its pivot weekly $115.59.
The weekly chart for Cracker Barrel
The weekly chart for Cracker Barrel is positive, with above its five-week modified moving average of $108.73. The stock is below its 200-week simple moving average, or the return to the average, at $149.98. The 12 x 3 x 3 weekly slow stochastic reading should rise to 65.11 this week, from 58.97 June 12.
Trading strategy: Buy Cracker Barrel stock on the weakness of its monthly value level at $93.82, and reduce the holdings on the strength of its quarterly risky level at $127.48.
How to use my value levels and risky levels: The share price closing price on Dec. 31, 2019, has been an entry to my proprietary analytics. Half-yearly and annual, the levels are still on the charts. Each calculation uses the past nine closes in these time horizons.
The second quarter of 2020 the level has been established based on the 31 March, close by, and the level of the month of June has been established on the basis of the May 29 close. New weekly levels are calculated following the end of each week, while new quarterly levels occur at the end of each quarter. Half-yearly levels are updated at mid-year, the levels are set throughout the year.
My theory is that nine years of volatility between the farm are to assume all possible bullish or bearish event for the stock are taken into account. To capture the volatility of stock prices, investors should purchase shares of the weakness of a plan, the value and reduce the holdings of the strength to a risky level. A pivot is a level value of the risk level that was violated in its time horizon. Hubs act as magnets that have a high likelihood to be re-tested prior to their time horizon expires.
How to use 12 x 3 x 3 weekly slow stochastic readings: My choice of using 12 x 3 x 3 weekly slow stochastic readings has been based on the backtesting of many methods of reading the stock prices of the momentum with the objective of finding the combination that resulted in the least number of false signals. I’ve been following the stock market crash of 1987, so I was happy with the results of more than 30 years.
The stochastic reading covers the duration of 12 weeks, high, low, and close for the stock. There is a row of calculation of the difference between the highest and the lowest compared to the farm. These levels are modified for a fast reading and slow reading, and I found that the slow playback will work best.
The stochastic reading scales between 00.00 and 100.00 with readings above 80.00 considered as overbought and readings below 20.00 regarded as oversold. A reading above 90.00 is considered to be a “swell parabolic bubble” of the training, which is usually followed by a decline of 10% to 20% over the next three to five months. A reading below 10.00 is considered to be “too cheap to ignore,” which is usually followed by a gain of 10% to 20% over the next three to five months.
Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.