Rupture Barrel Old Country Store, Inc. (CBRL) missed earnings per share (EPS) estimates on June 2, but the stock rallied promoting its 200-day simple moving average at $137.41 on June 5. Cracker Barrel is a combination country restaurant and power shop with a southern comfort feeling. Stores are located at many major exits along the Eisenhower Interstate Highway Way in the Southeast and the Midwest.
The stock closed Monday, June 15, at $116.17, down 24.4% year to date and in suffer market territory at 31.7% below its Feb. 25 high at $170.19. Cracker Barrel stock is also in a bull retail 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 paying a dividend, according to Macrotrends.
When the succinctness was on lockdown due to COVID-19, foot traffic into Cracker Barrel stores was weak. This changed on a dime as travelers amended to the highways recently. Along the I-95 corridor, the parking lots are full again.
The daily chart for Cracker Barrel
The everyday chart for Cracker Barrel shows the stock moving sideways along the 200-day simple moving ordinary until Feb. 26, when the bear market decline began. This is when the stock first closed not worth its 50-day simple moving average.
The stock then plunged to its March 19 low of $53.61. This day proved to be a key volte-face, as the close was above the March 18 high at $63.80. On the rebound, the stock returned to its 50-day simple moving usual on April 29.
After declining once again, the stock popped toward its quarterly pivot at $127.48, which be found lacking to hold on June 10. Cracker Barrel stock failed just below its 200-day simple poignant average at $137.41 on June 5. The stock traded as low as $107.46 on June 15, and today’s trade is between its quarterly spin at $127.48 and its weekly pivot at $115.59.
The weekly chart for Cracker Barrel
The weekly chart for Cracker Barrel is favourable, with the stock above its five-week modified moving average of $108.73. The stock is below its 200-week slow moving average, or reversion to the mean, at $149.98. The 12 x 3 x 3 weekly slow stochastic reading is projected to rise to 65.11 this week, up from 58.97 on June 12.
Buying strategy: Buy Cracker Barrel stock on weakness to its monthly value level at $93.82, and reduce holdings on strength to its trimonthly risky level at $127.48.
How to use my value levels and risky levels: The stock’s closing price on Dec. 31, 2019, was an input to my proprietary analytics. Semiannual and annual upfronts remain on the charts. Each calculation uses the last nine closes in these time horizons.
The second humanity 2020 level was established based upon the March 31 close, and the monthly level for June was established based upon the May 29 alert. New weekly levels are calculated after the end of each week, while new quarterly levels occur at the end of each quarter. Semiannual straight withs are updated at mid-year, and annual levels are in play all year long.
My theory is that nine years of volatility between closes are adequate to assume that all possible bullish or bearish events for the stock are factored in. To capture share price volatility, investors should buy appropriates on weakness to a value level and reduce holdings on strength to a risky level. A pivot is a value level or risky neck that was violated within its time horizon. Pivots act as magnets that have a high probability of being tested again ahead 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 out of it stochastic readings was based upon backtesting many methods of reading share-price momentum with the objective of declaration the combination that resulted in the fewest false signals. I did this following the stock market crash of 1987, so I bring into the world been happy with the results for more than 30 years.
The stochastic reading covers the last 12 weeks of highs, lows, and not far froms for the stock. There is a raw calculation of the differences between the highest high and the lowest low versus the closes. These levels are modified to a rakish reading and a slow reading, and I found that the slow reading worked the best.
The stochastic reading scales between 00.00 and 100.00, with readings in the sky 80.00 considered overbought and readings below 20.00 considered oversold. A reading above 90.00 is considered an “exaggerating parabolic bubble” formation, which is typically followed by a decline of 10% to 20% over the next three to five months. A look over below 10.00 is considered “too cheap to ignore,” which is typically followed by gains of 10% to 20% over the next three to five months.
Disclosure: The designer has no positions in any stocks mentioned and no plans to initiate any positions within the next 72 hours.