Chart of the Day: EAT

SPEAKER_1 (0:00)

It's time for our chart of the day. Joining us is going to be Ben Watson. He's the Senior Manager of Trading Services at Charles Schwab. Good to see you, Ben. We're talking food, we're talking Brinker, ticker symbol EAT. Got a nice upgrade today.

What are you seeing here on The Technicals?

Ben Watson (0:17)

Well, I'll tell you what, this parent company of chilies, primarily in Maggiano's as well, serving up a little bit of upward movement here in this short-term chart. Looking at 10-day, 30-minute chart, and getting a little bit of a bounce off of this 192 support level. The potential is there, it's broken through this point of control from a volume perspective, right around that 196 market. In the last couple of candles, last 30 minutes or so, starting to move upwards towards that diagonal trend line that's been in place there, for now a little bit beyond that 10-day timeframe. Start to see the trend strength increasing here. We've got the ADX on there above 25

Considered to be a strong trend, but then you look overhead. Up in that 212 area, there's some pretty decent volume where there has been some trading occurring. That could be the next challenge for this stock to continue this upward run on this upgrade, Tom.

SPEAKER_1 (1:14)

Yeah, upgrade, not a bad idea after the stock's been down about 12% so far this month. Ben, do you have anything longer term that gives you some perspective? Because this stock just hit all-time highs just about a month ago. What are you looking at here on a longer term?

Ben Watson (1:30)

Absolutely. Looking at one-year daily chart, that all-time high actually occurred as part of a double top type of pattern here up around that 260 mark. You start to see it rolling back over. In fact, kind of a textbook, if you will, I'll call it a classic because what's more classic than baby back ribs? Classic double top up here at this range, breaking through that 226, back down to the 196, which completed that pattern. Now starting to see this little bit of a bounce, maybe a bit of a turnaround with the momentum on this earnings announcement. We've got an earnings, or excuse me, on this upgrade. You've got the earnings announcement over the horizon here a little bit. The bounce back up, the big resistance area would be where it broke up around that 226

On the other hand, Tom, if investors don't like what's being served up and what's on the menu here, the break of that 196 could put it back down on that 168 level of support, which we saw back in the middle portion of the year for some time.

That becomes the real challenge here. But I guess maybe what you could say this morning is that at least, from the Chile's perspective, investors are eating this morning.

SPEAKER_1 (2:41)

Yeah. The analyst highlighted Chile's unit's position for longer-term growth, more marketing spend. So Baby Back Ribs doing well for this company. And you look at it, again, some of its competitors, you look at McDonald's, which has an investor day today also. It's been severely outperforming there. So everybody turn in to Chile's and Maggiano's here. All right. Great discussion. Thanks to Ben Watson.

He's a Senior Manager of Trading Services at Charles Schwab.