Famous Dave's of America (DAVE)

Company

"Famous Dave's of America, Inc. develops, owns, operates and franchises barbeque restaurants. As of today, the company owns 46 locations and franchises 129 additional units in 37 states. Its menu features award-winning barbequed and grilled meats, an ample selection of salads, side items and sandwiches, and unique desserts." (company website)

dave(2-1)
DAVE 4-month chart
dave(2-1)_1yr
DAVE 1-year chart

Buy

Dave's got a tremendous boost on very heavy volume from a delicious earnings surprise in April. Since then the price has pulled back to the 200-day moving average and begun rising again. The 50-day moving average is closing the gap with the 200-day MA, a bullish sign.

  • Percentage price oscillator (PPO) — although PPO is below the signal line, it is converging sharply
  • Volume — price jump after earnings was on very heavy volume

Based on technical analysis, MarketEdge calls DAVE a "buy" in a "strong upward trend."

Sell

gain Bottom line
3%

Well. As DAVE finally began to rise, the activation point for my stop-loss orders rose as well. As I result, I was stopped out of my position, albeit with a small profit. Trading in DAVE seems to go in spurts. Some days since I bought there has been almost no activity; other days, for no apparent reason, prices and volume take off. And being thinly traded it is susceptible to big gaps between Bid and Offer prices. All of that means that automatic trading rules don't always work the way one wishes they would.

The Bollinger band is narrowing, which usually presages a price move. Also, the 50-day moving average is now at the bottom Bollinger band. The turnaround has been dramatic, in a short time. I'm thinking that if DAVE breaks out, it will be when it reaches the previous peak ($7.00).