Taking a First Look at First Watch Restaurants. $FWRG- June 2, 2023
This is Scott with your Chart of the Day. I want to take a first look at First Watch Restaurant Group ( NASDAQ: FWRG ).
I don’t think I have ever covered or looked at this stock before, but it came up today as I was doing a MarketSmith scan. And as you can see, the stock IPO-ed in 2021 and it didn’t really do much. It went through what they call an Institutional Due Diligence phase. That is where it just kind of bases and consolidates near the lows, and recently has developed quite a nice little flag pattern here on the daily chart.
Now, I will point out that this stock doesn’t have a large float, it only trades about 57 million shares. And so that can mean that the stock may have a bit of a spread between the bid and the ask. And so because of that, if you are acting on this stock, you may want to watch your size just because of that spread.
But what I see here, on the daily chart, is a beautiful little flag pattern. You can see here from a high in early May, a downward sloping trendline, clear resistance, boom, boom, boom, boom, and we are right underneath here. The volume the last couple of days has been nice, higher than average, though again, it doesn’t trade a lot of shares.
Typically, I like stocks that trade a million, but I am looking for just clean patterns in this market and this is one of them. So we have a little bit of a longer-term cup, a potential handle and now I want to see a breakthrough of that level coming on higher than average volume. And so I would probably want to have an alert on this stock right around that $18.00 level.
And then again, watch for that move-through and then look for that volume confirmation that it has the potential to go higher and soak up any supply that may be lingering in the $18.00, $19.00, $20.00 range. So this is one stock that I am adding to my watch list, and I wanted to share it with you.
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