Panera Bread Co (NASDAQ: PNRA)

Panera Bread Company, together with its subsidiaries, owns, operates, and franchises retail bakery-cafes in the United States and Canada. The company operates three business segments: Bakery-Cafe Operations, Franchise Operations, and Fresh Dough and Other Product Operations. The Bakery-Cafe Operations segment operates company-owned bakery-cafes under the Panera Bread, Saint Louis Bread Co., or Paradise Bakery & Café names, which offer fresh baked goods, made-to-order sandwiches on freshly baked breads, soups, salads, custom roasted coffees, and other complementary products through on-premise sales, as well as provide catering. The Franchise Operations segment licenses the Panera Bread or Paradise Bakery & Café names and monitors the operations of these bakery-cafes. The Fresh Dough and Other Product Operations segment supplies fresh dough, produce, tuna, cream cheese, and proprietary sweet goods items. As of December 25, 2012, Panera Bread Company owned and franchised 1,652 bakery-cafes. The company was formerly known as Au Bon Pain Co., Inc. and changed its name to Panera Bread Company in August 1998. Panera Bread Company was founded in 1981 and is headquartered in St. Louis, Missouri.

To review Panera’s stock, please take a look at the 1-year chart of PNRA (Panera Bread Company) below with my added notations:

1-year chart of PNRA (Panera Bread Company)

Over the last (4) months PNRA has been consolidating within a common price pattern known as a rectangle. Rectangle patterns form when a stock gets stuck bouncing between a horizontal support and resistance. A minimum of (2) successful tests of the support and (2) successful tests of the resistance will give you the pattern. For PNRA, the rectangle pattern has formed a $170 resistance level (red) and a $155 support level (green).

The Tale of the Tape: PNRA has formed a rectangle pattern. The possible long positions on the stock would be either on a pullback to $155, or on a breakout above $170. The ideal short opportunity would be on a break below $155 or at $170.

Would you like assistance in making your TBS trades? If so, email me at Christian@yolopub.com and let’s talk about working together one on one!

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!

Good luck!

Christian Tharp, CMT