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Fan Yang

Yum! Brands (YUM) Holding at Key Channel Support

Yum! Brands $YUM has been persistently bullish since 2016. The daily chart below shows the rally within a rising channel. 

YUM Daily Chart

(click to enlarge)

Market Correction:
- Note that price action has been bullish until the recent overall market correction.
- So YUM is probably a candidate for buying on a dip for many traders. 
- Bulls also see the fact that price held above the channel support and the 200-day simple moving average (SMA). 
- I think in the short-term, there could be upside to test the 81.50-81.70 support/resistance pivot area. 
- A break above this pivot will be critical to reviving the bullish mode .
- Otherwise, YUM could be in for a longer correction. 
- if you look at the S&P500 chart, it is in a similar situation - holding above the 200-day SMA, but has a critical resistance above. -
Monitor Breakout
- If price breaks below 76, it would likely break the rising channel support and the 200-day SMA, at which point, we might say that YUM has turned bearish.
- However, I would suggest seeing what kind of breakout it is. If price slides sharply below 76, it would be a confident bearish breakout. On the other hand, if price and the RSI forms a bullish divergence, AND price is still holding above the 74 support, we should still consider a possible bullish swing to test that 81.50-81.70 area again.