Shares of coffee chain Dutch Bros Inc (NYSE:BROS) have been pulling back since early June, down 0.2% at $59.36 at last glance today. The stock looks due for a short-term rebound, however, as the recent price action has it running into the supportive 200-day trendline, which coincides with its year-to-date breakeven level.
Per Schaeffer's Senior Quantitative Analyst Rocky White, BROS is within 0.75 of the 200-day trendline's 20-day average true range (ATR) after spending at least 80% of the last 10 days and 80% of the last two months above it. Over the past three years, two similar signals have occurred, and the equity was higher one month later both times with an average 21% gain. A move of similar magnitude would put Dutch Bros stock at $71.82, erasing its July losses.
BROS' 14-day relative strength index (RSI) of 30.7 sits on the cusp of "oversold" territory. Plus, short interest represents 6.6% of the stock's available float, leaving plenty of pent-up buying power in the event of a bounce.
