This morning, Cheesecake Factory (CAKE) announced that Roark Capital invested $200M in the company in the form of a convertible preferred investment. CEO David Overton noted that the investment was critical to enhance the company’s liquidity position. The stock rallied almost 6% on the day. Given this background, let’s see what the charts tell us.
Cheesecake Factory (CAKE) Weekly Chart – annotations by askSlim.com
At askSlim.com we use technical analysis to evaluate price charts of stocks, futures, and ETF’s. We use a combination of cycle, trend and momentum chart studies, on multiple timeframes, to present a “sum of the evidence” directional outlook in time and price.
askSlim.com Technical Briefing: The weekly cycle analysis suggests that CAKE is in an intermediate-term rising phase in a very negative long-term pattern. The next projected intermediate-term low is due in early August. Weekly momentum is negative.
On the upside, there is an intermediate-term Fibonacci resistance at 21.77 followed by another zone of resistance from 26.26 – 29.88. On the downside, the only visible support is the recent 10-year low at 14.52. For the bulls to regain control of the intermediate-term, we would need to see a weekly close above 33.50 to repair some of the damage down on the downside.
askSlim.com Sum of the Evidence: CAKE is in an intermediate-term rising phase with negative momentum. Given these conditions, we would expect CAKE to rally up to the intermediate-term resistances beginning at 21.77 before seeing a reversal to the downside.
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