Fiesta Restaurant Group Inc (NASDAQ: FRGI)

Fiesta Restaurant Group, Inc., through its subsidiaries, owns, operates, and franchises fast-casual restaurants. It operates its fast-casual restaurants under the Pollo Tropical and Taco Cabana brand names. The company’s Pollo Tropical restaurants offer various Caribbean inspired food, and Taco Cabana restaurants offer a selection of Mexican food.

Take a look at the 1-year chart of Fiesta (NASDAQ: FRGI) below with my added notations:

1-year chart of Fiesta (NASDAQ: FRGI)

FRGI has been drifting sideways over the past few months, while also forming a key level of resistance to watch at the $26 (red) mark. The stock has already tested that level on multiple occasions, and is now looking to test it again. A break above that $26 level should lead to higher prices.

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The Tale of the Tape: FRGI has a key level of resistance at $26. A long trade could be entered on a break through that level. However, if you are bearish on the stock, a short trade could be made on any rallies up to $26.

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

Follow me on Twitter: @cmtstockcoach