Buffalo Wild Wings Hits Resistance
The powerful recovery rally off July's spike low has pushed Buffalo Wild Wings (BWLD) back up to a heavy layer of resistance. At Wednesday's highs, the stock had rallied more than 20% from its July 25 lows, retracing all of the post-Chipotle (CMG) disappointment flush in the process. Buffalo began to crack, along with most of the sector, just a few days before that -- after CMG reported a slowdown in traffic growth. Then BWLD took a 10% hit on its own news as downside trade surged to its heaviest level since early 2010. Shares quickly became oversold just as a major support zone near $70 was tested. The result was an important spike low followed by a steady rally that has now reached the $85 area.Buffalo Wild Wings (BWLD) Source: TradeStation View Chart » View in New Window »
On July 20, BWLD left behind a damaging breakdown gap just below $85. It's been a very light volume march back up to this level, but the seven-week rally has been very strong. Heavy layers of resistance have been sliced through along the way, including a 50- and 200-day moving average cross, as well as the June lows. The July 20 gap may prove to be a more important challenge. With volume remaining well below average since Aug. 1, upside momentum has been lacking. BWLD may have hit a near-term top....124 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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