DRI: Trend Channel Break and Drop

2021년 5월 10일

Since March 26, Darden has been in an extended downtrend which just violated its regression channel for multiple trading days. This has all happened despite the S&P 500 rallying nearly 5% to all time highs over that period.

Respect the channel, and short with confidence. Remember, we did this a few weeks ago with PLTR (Palantir), and the retail cult crowd was out in force to tell me I was an idiot. Guess what? Math won, and PLTR has tanked by nearly 20% in the last 3 weeks. Some non-professional investor's opinion about "fundamentals" based on things they read in the public media is unlikely to be any sort of edge under even the soft form of the Efficient Market Hypothesis.

But channels and trend following have a long history of success.

Here would be a response to the fundamentalist crowd:

1. All the possible good news around reopening is priced in, yet DRI is still in an extended downtrend.
2. COVID variants make moving past COVID problematic
3. Anti-vaxxers are holding the economy hostage, and this especially effects stocks like this that own fast casual restaurants.