Chart of the Day: Can Dutch Bros Get Things Brewing?
The coffee chain's stock has recently fallen hard. Here's what the shares need to happen now.
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As Dutch Bros BROS has sought to expand their menu offerings, its chart has taken on some water. The stock has dropped from recent highs on good turnover, and that means we have a downtrend in place.
Lower highs, lower lows is our textbook definition of a downtrend, and in this strong stock market you might have a hard time finding stocks with this bearish characteristic. No matter, the stock has fallen to levels where buyers bought shares back in the summertime, so we should see that pick up the stock here (around the $53-57 area).
No question, the chart and indicators are bearish — the MACD (moving average convergence/divergence) has been on a sell signal for about a month, the ADX is pointing up telling us the strength of the current trend is strong (it is down, of course). Money flow just went bearish, an indicator that was supporting the bullish argument as of late.
Will BROS get back up to the $72 level again? We think so eventually, but what this stock needs is a nice period of base building first.
We like Dutch Bros in TheStreet Pro Portfolio and rate it a Two, or "stockpile on pullbacks."
At the time of publication, TheStreet Pro Portfolio was long BROS.
