Following its July 2011 initial public offering Dunkin’ Brands Group Inc (DNKN) was sent on a bumpy ride for the first eight months of the listing.  The coffee and breakfast chain operator had a strong rally off its late 2011 lows that ultimately retraced exactly 61.80% (an important level for those following Fibonacci study) by August 2012.  This August 2012 low thus acted as a meaningful higher low versus the late 2011 lows and allowed the index to shape an orderly up-lift over the ensuing seven months to the present day.  Along the way Dunkin’ Brands Group Inc (DNKN) encountered two speed bumps, one that lasted from October to January 2013, the other lasted from late January to early April.  In other words, the rally in the stock continues to take place in an orderly fashion where rallies consolidate before they move higher.

More near-term on the charts the stock has recently formed a smaller consolidation pattern that looks ripe to let the stock lift to new all-time highs.  Over the past four trading sessions Dunkin’ Brands Group Inc (DNKN) consolidated a big one day rally from last Friday April 5th.  That day’s move hurdled the stock past the resistance area near $38.30, thus the past few days’ mini consolidation period is happening right above previous resistance.  A break out of this consolidation phase could move the stock towards the $43 level.  Investors should be aware of the company’s earnings report scheduled for Friday April 26.

 

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