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Fan Yang

I Believe a Bullish Swing is Coming for Wendy's (WEN)

Wendy's $WEN has been in a period of consolidation since it tagged 16.50 in June. The daily chart shows the choppy bearish correction pattern.

Wendy's Daily Chart

(click to enlarge)

- Corrective Pattern:
- The daily chart shows price in a choppy correction since tagging 16.50. It has almost reached down to 13.50 and has gone through 5 swings (abcde). We might still be in wave e, where we can expect another low, or it could be truncated. 
- The main thing to focus on is that this bearish structure looks like a correction, not the primary trend.
- The primary trend therefore might still be bullish.
- If we make this assessment, we can then say that price action appears slightly oversold because the RSI just tagged 30. 
- Again, we might still see some downside, but if we see a bullish divergence with the RSI around 30, we should have even more confidence that a bullish swing is coming soon.

Bullish Momentum?
- The weekly chart below shows a secular bull market since 2013. 
- Technical analysis shows that this trend is still going. 
- Furthermore, the RSI should turn up from 40 if the market is indeed still bullish. 
- Therefore, if we do believe Wendy's is bullish, we should consider 13-13.50 area a possible base for a bullish swing that has the 16.50 area in sight, with the potential of extending the trend higher. 
- A break below 13 however opens up the 11.50 area, a previous resistance pivot and possibly where price will meet a rising trendline and the 200-week simple moving average (SMA). 

Wendy's (WEN) Weekly Chart

(click to enlarge)

  • 11 11 correctly predicted forecasts
    Richard
    Interesting. Look like it. Q3 Earning report was worse than anticipated and next qtr will be same according to the report. Wait little more dip and buy? I am thinking.
    Reply
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