With the markets attempting to bottom out, it's interesting to see which groups are taking the lead on the rebound. While the majority of stocks are groping for a bottom along with the indexes, some groups are sprinting to not only new yearly highs, but also all-time highs. This is a great show of relative strength, and is a sign of institutional sponsorship.
TUTORIAL: Top Stock-Picking Strategies

One of the groups with good representation in this list of stocks making all-time highs is the restaurant stock sector. Americans love to eat out, and apparently it doesn't matter whether the economy is soft or not. Beyond the risk of a weak economy, these stocks have been able to shake off increased health consciousness by the general public by either catering to them with "healthy options," or simply catering to "larger is better" motto that we American's love.

Certainly no stranger to playing on gluttonous themes, Yum! Brands, Inc. (NYSE:YUM), parent company to Pizza Hut, Taco Bell and Kentucky Fried Chicken, among other well known brands, is trading just shy of its all-time high near $57. It cleared an important resistance level around $52 in late April on a high volume gap. After a quick retest, YUM rallied to its all-time high a few weeks later. YUM has been following channels on both the upward rally, and the subsequent consolidation the past few weeks. Traders should watch the $56 level to see if YUM is ready to resume its uptrend. (For more, see the Most Commonly Use Forex Chart Patterns.)

Despite the threat of a lockout in the NFL this year, Buffalo Wild Wings, Inc. (Nasdaq:BWLD) continues to push to new highs. BWLD is already extended after rallying over 10 points in the past couple of weeks. However, it is acting very strongly and has to be considered a market leader after its yearly performance. While some consolidation is to be expected, trader should keep a close eye on prior resistance near $63.50 as a possible area for support moving forward. (For related reading, see Gauging Support And Resistance With Price By Volume.)

McDonald's Corporation (NYSE:MCD) is another stock in this sector pushing to new all-time highs. MCD looked to be in trouble late last year and through the early part of this year. It slipped under its 50-day moving average and threatened the 200-day moving average on a couple of occasions. However, it began a steady climb to new highs in March, ultimately reaching $83 in May. MCD had been trading sideways while the markets weakened until exploding yesterday to new all-time highs. MCD may also be extended depending on your time frame, but the trend certainly seems higher for this stock. (For more, see Moving Average Strategies.)

Humongous burrito maker, Chipotle Mexican Grill, Inc. (NYSE:CMG) is also trading at all-time highs. CMG has been difficult to ascertain the past few months, but it has been steadily grinding higher since clearing a resistance level near $260 in February. It is following a channel as it rises and is currently near the top of the established range. Traders should likely not chase it at these levels, but CMG could present a good opportunity on a light volume pullback towards the $280 level.

The Bottom Line
It's still too early to know if the current bottoming attempt in the markets will amount to anything or not. However, when several stocks in the same group are pushing to new all-time highs, it behooves a trader to take notice. The restaurant stocks were one of the strongest groups over the past year and are showing great relative strength right now. If the markets continue to show some strength, then this group will likely continue to push to new highs.

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

Charts courtesy of stockcharts.com

At the time of writing, Joey Fundora did not own shares in any of the companies mentioned in this article

Related Articles
  1. Trading Strategies

    How To Buy Penny Stocks (While Avoiding Scammers)

    Penny stocks are risky business. If want to trade in them, here's how to preserve your trading capital and even score the occasional winner.
  2. Chart Advisor

    Stocks to Short...When the Dust Settles

    Four short trades to consider, but not quite yet. Let the dust settle and wait for a pullback to resistance for a higher probability trade.
  3. Technical Indicators

    Using Moving Averages To Trade The Volatility Index (VIX)

    VIX moving averages smooth out the natural choppiness of the indicator, letting traders and market timers access reliable sentiment and volatility data.
  4. Chart Advisor

    Strategizing for a Market Fall...or Rally

    The downtrend isn't confirmed yet, so be prepared with trades for whether the stock market rallies or continues to fall. Here's how to do it.
  5. Trading Strategies

    Are You a Trend Trader or a Swing Trader?

    Swing traders and trend traders execute market timing strategies that require different skill sets.
  6. Technical Indicators

    Detrended Price Oscillator Trading Strategies

    The detrended price oscillator (DPO) offers a simple approach to cycle analysis, removing momentum and long-term trends from the equation.
  7. Investing

    Using Fibonacci to Analyze Gold

    Use Fibonacci studies to analyze gold by picking out hidden harmonic levels that can provide major support or resistance.
  8. Investing

    Predictions For The Stock Market

    Learn different choices and strategies that can be used to create a profit regardless of what direction the market is going.
  9. Chart Advisor

    Top ETF Performers YTD - They'll Surprise You

    The top performing ETFs of 2015 may surprise you. Here they are, and the outlook for them going forward.
  10. Chart Advisor

    Four ETFs for Trading Falling Crude Oil

    Commodity traders are turning toward oil because the recent move below a key support level is signaling a move lower. We'll look at four ETFs you can use to gain exposure.
  1. Fintech

    Fintech is a portmanteau of financial technology that describes ...
  2. Indicator

    Indicators are statistics used to measure current conditions ...
  3. Intraday Momentum Index (IMI)

    A technical indicator that combines aspects of candlestick analysis ...
  4. Mass Index

    A form of technical analysis that looks at the range between ...
  5. Money Flow Index - MFI

    A momentum indicator that uses a stock’s price and volume to ...
  6. On-Balance Volume (OBV)

    A momentum indicator that uses volume flow to predict changes ...
  1. What assumptions are made when conducting a t-test?

    The common assumptions made when doing a t-test include those regarding the scale of measurement, random sampling, normality ... Read Full Answer >>
  2. How are double exponential moving averages applied in technical analysis?

    Double exponential moving averages (DEMAS) are commonly used in technical analysis like any other moving average indicator ... Read Full Answer >>
  3. How do you know where on the oscillator you should make a purchase or sale?

    Common oscillator readings to consider making a buy or sale are below 20 or above 80, respectively. More aggressive investors ... Read Full Answer >>
  4. What are the alert zones in a Fibonacci retracement?

    The most commonly used Fibonacci retracement alert levels are at 38.2% and 61.8%. A 50% retracement level is also commonly ... Read Full Answer >>
  5. How was the Fibonacci retracement developed for use in finance?

    The use of Fibonacci retracements in stock trading was popularized by noted technical analysts W.D. Gann and R.N. Elliott. ... Read Full Answer >>
  6. How was the stochastic oscillator developed?

    The history of the stochastic oscillator is filled with its own controversies and inconsistencies. Most financial resources ... Read Full Answer >>

You May Also Like

Trading Center

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!