Good technical signals and a possible breakout for YUM CHINA HOLDINGS INC.

Our stock screener has spotted YUM CHINA HOLDINGS INC (NYSE:YUMC) as a possible breakout candidate. A technical breakout setup pattern occurs when the stock is consolidating after a nice uptrend. Whether the actual breakout occurs remains to be seen of course, but it may be interesting to keep an eye on NYSE:YUMC.

Technical analysis of NYSE:YUMC

ChartMill assigns a proprietary Technical Rating to each stock. The score is computed daily by evaluating various technical indicators and properties. The score ranges from 0 to 10.

Overall YUMC gets a technical rating of 8 out of 10. Although YUMC is only a medium performer in the overall market, the technical picture looks good in both the medium and short term time frames.

• Both the short term and long term trends are positive. This is a very positive sign.
• YUMC is part of the Hotels, Restaurants & Leisure industry. There are 148 other stocks in this industry. YUMC outperforms 74% of them.
• In the last month YUMC has a been trading in the 46.77 - 52.36 range, which is quite wide. It is currently trading in the middle of this range where prices have been consolidating recently, this may present a good entry opportunity, but some resistance may be present above.
• When comparing the yearly performance of all stocks, we notice that YUMC is one of the better performing stocks in the market, outperforming 77% of all stocks. However, this overall performance is mostly based on the strong move around 7 months ago.
• YUMC is currently trading in the middle of its 52 week range. The S&P500 Index is currently trading in the lower part of its 52 week range, so YUMC is still doing slightly better than the market.
• Volume is considerably higher in the last couple of days.

Why is NYSE:YUMC a setup?

Next to the Technical Rating, the Setup Rating of a stock determines to which extend the stock is consolidating. This score also ranges from 0 to 10 and is updated daily. The setup score evaluates various short term technical indicators. For NYSE:YUMC this score is currently 9:

Besides having an excellent technical rating, YUMC also presents a decent setup pattern. Prices have been consolidating lately and the volatility has been reduced. There is a support zone below the current price at 49.72, a Stop Loss order could be placed below this zone. We notice that large players showed an interest for YUMC in the last couple of days, which is a good sign. Another positive sign is the recent Pocket Pivot signal.

Trading setups like NYSE:YUMC

One way to play this would be to wait for the actual breakout to happen and buy when the stock breaks out above the current consolidation zone. A possible place for a stop loss would be below this zone.

Of course, there are many ways to trade or not trade NYSE:YUMC and this article should in no way be interpreted as trading advice. The article is purely based on an automated technical analysis and just points out the technical observations. Always make your own analysis and trade at your own responsibility.

More breakout setups can be found in our Breakout analyzer.