CAVA restaurants, Post IPO chart analysis

Cava is a Mediterranean food restaurant where you can build your own healthy bowls, similar to Chipotle. It IPO’ed in June 2023 and has 263 restaurants in 22 states and DC. I have not yet seen or been to one here in Florida. It had plans to open 44 more in 2023. That would have been a little less than 20% restaurant growth.

I am often skeptical about restaurants, for instance, I hate the idea of Sweet Greens with offers a health salad bar at what I suspect is a high price. SG seems like a very limited audience, while Cava seems more likely to be repeat customers, because salads just suck and not many people want that frequently.

Anyway, I feel this has potential to grow fast for a few years, maybe like Chipotle, but I would not buy without the proper chart, fundamentals and breakout.

The weekly chart shows and early IPO base that had a decent return and then a quick decline. Now, the green EPS growth rate line show good growing EPS, of course starting from a new company’s small base.

Recently you can see a number of blue volume bars with above avg volume.

The Daily chart…
Here we see more detail on the IPO base that we missed, looks like a double bottom. Early IPO bases are usually short and more volatile than a more mature base. Very hard to trade (for me).

In that big cup with handle base (that I missed), we see a number of good signs. There are some big (red) volume shakeouts that got rid of a lot of weak holders. These occurred early on the left side and then at the bottom of that base (we love that). The bottom of the base spend some good time bouncing around support at the $29 level. We see a high volume up day that shot the stock above the 50dma and 21dma at the same time. Huge volume! This is a place where many a good trader might take a chance. I might have taken a small position, but I probably would have waited for more proof of strength.
After that volume cooled off as the base built the right side. There was more blue/up volume than red/down volume, which you need to see on the right side of a base.

On Jan 24, it started to build a handle on the cup, something I love to see. Many of the great stock runs in history started with a cup with handle base. But, a lot of those were good stocks that were consolidating during a long market correction, and then having strong earnings and high RS, were able to blast off as the market started a long rally.

This handle and subsequent breakout where highly flawed. The length of the handle was 5-6 days, which is acceptable in CANSLIM (IBD), but given the 126 long cup, it was relatively too short. Like a good handle, it slowly declined on decreasing volume (sellers drying up). Then one day it broke out above the high point of the handle. Unfortunately, volume was only 11% and we need at least a 40% vol increase to give us confidence the professionals are buying this and will support our buy prices. For that reason, no one should have bought here. (in retrospect, it went up in price a lot, but you can’t know that. You can hit on a 19 in blackjack and get a 2, but you should not take that chance).

So now I wait with this on a watch list. I have sketched in a hopeful base that might form with at 15% or more correction, but that is pure speculation. But I won’t buy without a proper base and continuing good earnings.

How would you have handled this, keeping in mind that you don’t know the outcome at the time you are making your buy.


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Pretty charts don’t make it. You want charts to tell you exactly what to do with less chaatter. Simplicity werks best.

Your charts don’t tell you where the Out of the Gate is. (when to buy) Nor the Finish lines is at. Stick to daily and 5 minute charats.

Your job is to make money the olde fashion way.

CAVA chart shows Zero Losses.

Quill - A poor church mouse scratching for a living as a Swing Trder.

Not to buy yet per the buying riles.

Sure they do. This chart is not ready to buy, but here are some that show where to buy based on pattern recognition. CANSLIM first says screen for stocks with the strongest growth fundamentals, then “buy right” based on chart technicals. The box on the left shows when I bought it. That blue box is the buy zone and the rule is when it is breaking through the buy point on vol 40% more above avg, (and all fundamentals are strong, and the market is in an uptrend), then buy. You can see my green buy marks on the chart and you can see I tood some early entries then finished off as it broke through on volume. The chart on the right is from day. The old buy zone markings are gone because they no longer apply, but the red arrow points to where I bought it. There are various sell rules that I will post someday, and a few are chart based, like slicing through the 50dma on high volume. But some are more subtle.

Here is the chart of MLM I bought on a breakout. You can see the green markers I put in on my buys. I also annotated with a note about the chart so I could keep reviewing my logical before making a sell decision. You can see the tall blue bars below where I bought it, that is the reason I bought it early, the market was telling me big money was coming in just befor the official buy point. IBD discussions point out early buys rationales. I highlighted some very bit blue bars in Feb and March to remind me this is still under strong institutional accumulation. It is in a new consolidation now, but not an official base yet. The current market action might nullify that.

This next chart is Tenaris Steel (TS). The breakout was with volume 200% above average so I jumped in (green lines). I was not happy with the action in absolute terms and relative to other opportunities. IBD has taught me to be willing to cut the line in a situation like that, so I did (red line). No black and white sell sign on the chart and it did not reach a 7% loss or go below the 50dma, but part of trading is the experience of past actions and the wisdom of others. It ended up losing a lot soon after, but then had a strong breakout on earnings, but it was not on my radar at that time.

Here is DKNG. I was a little skeptical of the stock so ignored the first breakout. You can see from the volume bars in Nov 2023, that it really had backing. Remember, the FTD was 11/1, so there was a signal to start buying great stocks. Luckily, it created a second base in December. Since it had not advance 20%, this was a “base-on-base” and still a “Stage 2” like the earlier base. You can see the green lines where I bought. I drew lots of magenta lines looking for a break in the downtrend as an early buy signal. You can see I did act on that once for an early buy. Then I bought in the breakout. Later, you see I drew that thick magenta line for another downtrend. I used this as an add on as Bill O’Neil advises (pyramid up on winning stocks, never average down). I wrote myself a sell-plan on the chart, which is to watch for bad action around the 50dma, which we may finally see next week. If Monday is bad, I might just cash in my profits even though there might not be a screaming signal on the chart.

So maybe this helps answer your statement.



“CAVA chart shows Zero Losses.”


You’ve made that claim before of your charts showing “zero losses”. But I’m going to call you on it.

No one’s charts won’t have whipsaws, nor will anyone’s trading system(s), especially not if the system is a rules-based, trend-following system, which does describe your various Simon systems whose typical win/loss profiles can be shown through back-testing to be about 35% wins to 65% losses.

That’s just the nature of time-period series. Not all of the wiggles and waggles are predictable. At best, we can catch most of a trend and can cut our often frequent losses before they get out of control. In a rising market, one can wait out short-term term reversals and --after the fact-- claim no loss was incurred. But when markets are choppy, which is abut one-third of the time, losses --meaning, the present price of the tradable is currently less than our entry price-- will be frequent.

Yeah, for sure, sometimes it’s possible to catch a breakout, and prices never look back. But the more common pattern is a retest of the low and often repeatedly so.


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No problem, I don’t know how to play Poker, Blackjack, Craps, hate Slots. But, I know to play Baaccarat (earning $500.00 a day) and Roulette (european) earning $500.00 with Risk and Money Management skills with about an hours time or two. 7 days a week while my wife is sleeping. Usually from 11 pm to 1:00 am EST. As your well aware I am a Care Giver to my wife for the past 24 years 7 days a week.

Your using as a guess analytical tools. As apposed to using pencil and graft paper I have used for over 60 plus years and dozens of Yellow legal pads as back up. Next week I’ll be ordering my new high speed FALCON Trading computer with two monitors. Tyred of runing on one monitor. My TIVO Romaine died after 15 years and had to get a new TIVO EDGE DVR for my wife.

Let’s use my latest COST. You run your numbas analytically and shall use pencil and paper or a spreadsheet.

Bankrooll $400,000.00 which is my 4 Grandkids College Fund for the next 6 years to 10 years when they graduate high shool.
Per the rules you may follow along with the attached COST daily chart.

Current batting average is 8 for 8 equates to 1000 percent via the poer of compounding

In 8/7/2022 - 704 shares at $557.46 - $392,451.84 - Sold 8/15/2023 - $560.67 - $394,711.68 - $2,259.84

In 8/23/2023 - 729 shares at $539.68 - $393,426.72 - Sold 9/15/2023 - $559.96 - $408,210.84 - $14,784.12

In 9/20/2023 - 722 shares at $564.61 - $407,648.42 - Sold 10/19/2023 - $568.01 - $410,103.22 - $2,454.80

In 10/24/2023 -728 shares at $555.89 - $404,687.92 - Sold 11/8/2023 - $569.41 - $414,530.48 - $9,842.56

In 11/10/2023 -718 shares at $577.40 - $414,530.48 - Sold 11/16/2023 - $581.63 - $417,567.31 - $3,036.83

In 11/20/2023 -718 shares at $581.56 - $417,567.31 - Sold 12/14/2023 - $631.79 - $453,633.07 - $36,065.7

In 12/18/2023 -684 shares at $663.61 - $453,633.07 - Sold 3/8/2024 - $744.07 - $508,634.23 - $55,001.16

In 3/12/2024 -675 shares at $734.56 - $495,828.00 - Sold 3/22/2024 - $737.30 - $497,677.50 - $1,849.50

In 4/4/2024 -700 shares at $710.60 - $497,677.50 - W A I T


DO YOU SEE ANY LOSSES with my grandkids college portfolio. If there comes at a time twith a loss, SO WHAT. I will still continue for the next 6 years as a TARGET of 6 million.

Now, let’s look at the Chart of the Day CENX from Barchaart starting on 5/12/2024 Out of the Gate, it appears we have a 9 for 9 with ZERO losses. I don’t currently see any losses.

CHARTS DON’T LIE - PEOPLE DO as your well aware.

Quill- a poor church mouse scratching for a iving as a Swing Trader

        • Vision - a Billionaire - Goal - earn 1.5 to 3.0 Percent daily.


Much thanks for two things. One, taking my comments as a basis for the further discussion as they were meant to be. Two, providing some actual trades, so I can reverse-engineer the signals you seem to be responding to and then run them though a back-tester.

Give me a day or two to get back to you on this.

An aside. I was expecting a sell-off this morning, due to Iran’s successful response to the attack on their embassy, and I couldn’t understand why it didn’t happen. But I’m glad to see that the sell-down is now unfolding.

Charlie – a humble boat-builder who has pretty much lost interest in markets and trading but who played the game for enough years to retire on and who has some nieces and nephews I’d be willing to fund and teach if I could find a truly simple method for pulling more money out of markets than one brings to them.