Buy Signal on WEN Stock After Strong Earnings Release – May 8, 2014

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Buy Signal on WEN Stock After Strong Earnings Release - May 8, 2014

Buy Signal on WEN Stock After Strong Earnings Release - May 8, 2014

WEN stock prices are stalling at a major support level, which is visible on the daily time frame. A doji has formed right on the $8.30 area, indicating that a bounce might be in the cards sooner or later.

At the same time, MACD is indicating heavily oversold conditions. This could be a signal for buyers to jump in with long positions at a good support level which has held for the past few months for WEN stock.

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WEN Stock Forecast

Shares of Wendy’s could gain strong support from a very positive earnings release earlier this week. The fast food company announced that first-quarter earnings beat expectations, thanks to strong sales in company-owned locations.

Earnings of $46.3 million or 12 cents a share, higher compared to the previous $2.1 million or a penny a share, last year. This was sparked by a strong gain of a $44 million in facilities actions, which are related to restaurant sales and WEN stock price gains.

The company was able to trim its operating expenses significantly, allowing them to enjoy stronger profit margins. Revenue, however, fell 13% to $523.2 million due to lost revenue from company-owned locations following the restaurant sales. Moving forward, the company plans to offer both low-cost and high-cost options in its menus, helping segment the markets.

A stock price bounce from the current levels could take WEN stock to the next resistance at the $9.00 mark. Take note though that the 200 SMA (simple moving average) is currently holding as a near term ceiling for WEN stock price action, which means that price needs to make a strong break above it or at least close above the daily doji’s high to confirm the potential rally.

To contact the reporter of the story: Jonathan Millet at john@forexminute.com