Hi guys. Always on the lookout for major changes/shifts or Macro signals. Yesterdays 40% increase in Krispy Cream Donuts, has me taking a look into this one.
This analysis is on the 1 week. Note, the current candle is not yet confirmed. Weekly close is obviously on fridays.
I have highlighted 2 zones. COnsolidation range and a Supply zone. We do need to pay attention to these 2 ranges.
BEcause atleast from previous history the supply zone is a resistance zone and thus a sell area. We would need decisive candle closes ABOVE for multi weeks for me to gain confidence that it has flipped to Demand or Support.
Same goes for breaking out of the consolidation range. More info is needed such as confirmation.
But nevertheless, What had me looking DNUT's way, was candle moving past the major resistance trendline that has haunted us since the stock being traded publically.
I would like to note on the weekly timeframe, confirmations have not come in yet, and until proven otherwise it can be a fakeout and can always come back into the consolidation zone. AGAIN, End of week will give us better information.
But it does not take away the fact that DNUT is moving. And atleast for now, DEMAND exists.
VOLUME needs to follow with continued increase.
Things to note in our indicators:
RSI, breaking a major trend by signaling a higher high. But again end of week will clarify this. If it prints, i see it as a positive sign.
STOCH RSI - crossing bullish with is almost above 20 lvl. This indicates possibility of momentum coming in to support an uptrend.
MACD - Has Bullish cross, however we need to see whether or not we can get ABOVE 0 lvl. This would indicate a high probability for a sustainable uptrend.
Being that this weeks candle has not yet closed. It is absolutely important to continue to observe. But DNUT has made it to my watchlist for sure.
Is Krispy Cream Donuts, the Donut for me and you? Well time will tell. LOL.
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Kommentera
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Note we are back inside the consolidation range. Supporting the idea, that consolidation breakout was a FAKEOUT. Especially if there is a decisive candle close today inside range.
Notice how Massive each daily candle is. Moves like this without follow through are not sustainable. Giving up our gains in a matter of 1 day.
Watch for Support on the Resistance trendline highlighted above.
This is a major defense line. However note the gap as well. Likely we continue further to the downside.
Kommentera
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So on the 1 week. We have officially closed ABOVE the major resistance trendline formed since July 2021.
Until proven otherwise, such as my indicators flipping bearish or moving back below Resistance trendline, i will continue to observe for continued upside.
****NOTE we still need to CONFIRM. this breakout by another weekly candle print. A decisive candle is required, no small body stuff or equal length upper/lower wick candles.
Next week candle CLOSE will be crucial to get more data on whether it is truly breaking out due to demand or if it truly is a fakeout, and we go back down to where we started this pump from. Only Time will tell.
Kommentera
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So update on indicators i watch.
The Massive breakout shown above on RSI, was a fakeout. A higher high on RSI is needed for any chance of the current Resistance trendline breakout to maintain.
Note STOCH RSI and MACD still showing signs of Bullish momentum starting to take over.
STOCH RSI much continue ABOVE 20 lvl and keep moving up to overbought terrority. Any signs of bearish cross would be a negative sign.
MACD cross must continue to cross ABOVE 0 lvl and for green histobars to increase in height. This would also help maintain this breakout.
Again, a reminder, though we have broken out of the resistance trendline. We STILL HAVE NOT YET CONFIRMED This breakout.
Continue to monitor. Don't take trades based on gut feeling alone. Must Wait for technical developments.
Kommentera
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We have closed 2 consecutive weeks ABOVE Major resistance trendline.
Note however, Last weeks candle was NOT decisive.
Small candle body with double sided long wicks.
I personally would wait to see next week's candle.
Still risk of FAKEOUT exists.
Important to continue observing.
Kommentera
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We are now back BELOW the resistance trendline highlighted.
With last couple days confirming us back below.
It would need to surge back ABOVE atleast 14.50 to show any signs of demand.
If Friday comes and we continue to stay below, this would imply a fakeout on 1 week.
If we print a candle thats below next week, confirmation would be in.
This would mean an end to the surge that DNUT had from the Mcdonalds news.
And a likely retrace back to where DNUT was before the news.
it will drop like a stone, fundamentals rules here soon or later it will drop like a rock to previous level s
SafofAllTrades
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@GabakTrader, Very probable. BUT lets take it one step at a time. TA wise.
ChelGod
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Fundamentals have vastly improved for this business.
SafofAllTrades
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@ChelGod, Maybe so, but hard to tell if fundamentals are already priced in or will be priced in later. ALways better in my opinion to focus the technicals. And right now im taking it step by step as things develop. Mentioned above.
ThaFlashy
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GET IN
SafofAllTrades
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@ThaFlashy for a trade? based on what factors? For investing? maybe But for a trade -> There's plenty of other names that are better setups. I wouldn't take this as a trade right now.
AwesomeAvani
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The play is finished. the agreement with McDs not until 2026. Sugar buzz burned out. It was good yesterday. The fade is on. Question is whether there is a backside play. ( A so called long squeeze).
SafofAllTrades
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@AwesomeAvani, True, thats what the technicals are showing, as we are back inside the consolidation range. But will continue to watch long term. This is a deal that will raise revenue for Krispy. And for a backside play. Watching intraday oversold and test of some demand zones for sure. Take advantage of the volatility and volume influx.
AwesomeAvani
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@SafofAllTrades, Thanks. I am a physician in primary care and emergency medicine. The whole anti-obesity and diabetes trend with the new biological injectables is huge. Food manufacturers and distributors are concerned because 1/3 of the popluation eats 1/2 the food and many are now getting treatment. Krisy gets no revenue until they sell more donuts than currently. The trend I describe is far greater than Krispy. ( BUY LLY). I was happy to catch the news feed and technicals before the breakout with a 50K position that went 42% and have caught a piece of the backside also. Time will tell. IMO Krispy's momentum is nothing. For all i know, insiders ( there are many) could have orchestrated the whole thing. Have you seen the agreement? ( It is revocable)- contrived future growth is worse than no growth the backlash from investors and traders after the next couple of earnings could cause a big downturn. i am trading consumer staples food like GIS and TSN but not fastfoods and so on I believe MCD CMG and others will lose the growth mirage in time ( IMO obviously) stocks directly correlated with diabetes and obesity will suffer the most perhaps. I got what I wanted out of DNUT. I believe that it will turn into a good long period short- i have a put option into 2026. In my book, the writing is on the wall.