Olive Garden parent DRI is sounding a bullish alarm on the charts
Olive Garden parent Darden Restaurants, Inc (NYSE:DRI) was last seen down 0.9% at $157.22. The shares have been unable to maintain their September six-month highs, which came after an upbeat earnings and report partnership reveal sent the stock gapping higher by 8.3%. Since then though, the equity has dropped into the red for 2024 and logged eight of its last 10 sessions lower. All is not lost, if past is precedent, as DRI looks to be approaching a historically bullish trendline.
According to the latest data from Schaeffer's Senior Quantitative Analyst Rocky White, Darden Restaurants stock is within one standard deviation of its 50-day trendline. For the purpose of this study, White defines that as the equity trading above the moving average 80% of the time over the past two months and closing north of the trendline in eight of the last 10 sessions before coming within striking distance of it.
Per White, eight similar pullbacks occurred in the last three years. In the month after these signals, DRI averaged a 1.5% gain, and finished positive six of the eight times. A similar move would put the shares back near the round $160 level and into recovery mode. It's also worth noting that the shares' 14-Day Relative Strength Index (RSI) checks in at 19, firmly in 'oversold' territory, an indicating a short-term bounce could be in the cards.
Amid low absolute volume, options pits are looking bearish, and should this sentiment begin to unwind, it could trigger tailwinds for DRI shares. Specifically, at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OM X PHLX (PHLX), DRI’s 50-day put/call volume ratio of 3.43 ranks in the 96th percentile of its annual range. Echoing this, the security's Schaeffer's put/call open interest ratio (SOIR) of 2.06 stands in the highest possible percentile of reading from the past 12 months.