No Sauce In Domino's Earnings, But This Chart Is Looking Red

Summary:

• Domino's Pizza, Inc. DPZ shares plummeted over 9 percent on Thursday after the restaurant chain missed Wall Street's expectation on earnings, revenue and same store sales.
• The stock was trading about 2.4 percent higher on Friday.
• Based on its market cycles, we expect more downside action in the coming weeks.

Domino's Pizza Stock Weekly Chart

The company reported earnings per share of $2.62 and total revenue of $1.08 billion, below to analyst estimates of $2.70 and $1.1 billion. Same store sales rose by 5.6 percent, below the average estimate of 6.9 percent.

Despite missing these key metrics, CEO Ritch Allison explained that, "I am pleased with our fourth quarter, which capped a very strong 2018. Our long-game approach, driven by fundamentals and the finest franchisee base in across the globe, continues to pace the industry."

Looking at the market cycles for Domino's, we can see that the stock has likely started the declining phase of its current cycle. The downside gap suggests declining phase has taken hold and a major top is in place. Our near term target is $230, with a probable sub $200 price later in the year.

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