DailyPlay – Dominos Pizza Inc (DPZ) – November 1st, 2021

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Market Outlook:
After a big week for big tech with regards to earnings, the major equity indices ended the week at new all time highs. AAPL and AMZN disappointed on earnings after the bell on Thursday causing both SPY and QQQ to open lower, but strong momentum carried the indices 0.2% and 0.5% higher respectively. The next major event will be the Fed’s 2 day meeting this Tuesday – Wednesday which is expected to cause some volatility as markets prepare for a tapering of monetary policy. Sector rotation remains relatively healthy and indicates broad market participation. Rotation into Discretionary remains strong with Healthcare, Tech, and Real Estate also providing leadership. Sectors to avoid are Communications and Staples, both of which are showing weak momentum and relative strength.

DPZ Bullish Trade Idea:
Our bullish trade idea today is Dominos Pizza Inc (DPZ). DPZ is part of the Consumer Discretionary sector which is the strongest sector currently and is outperforming on strong momentum and relative strength against the market. Price recently rallied to a minor resistance level at $489 and strong momentum on both the weekly and daily timeframes indicates that this level will be broken. From a fundamental perspective, DPZ has been successful in utilizing its digital assets to gain market share in international markets. 

As this is a credit spread, look to take profits at 50% gain and cut losses at 100%:

• Take Profit: $5.10 Debit
• Stop Loss: $20.40 Debit

View DPZ Trade