Key Takeaways
- Domino’s Pizza shares jumped nearly 8% in extended trading on Thursday after a filing revealed that Warren Buffett’s Berkshire Hathaway had taken a stake in the world’s largest pizza chain.
- According to a 13-F filing, the conglomerate bought nearly 1.3 million Domino’s shares that had a market value of about $550 million as of Sept. 30.
- The stock sits poised to resume its bullish price momentum on Friday after recently retracing to the top trendline of a symmetrical triangle.
- Investors should monitor important overhead levels on Domino’s chart around $473, $505, and $535, while watching a key area of support near $435.
Domino’s Pizza (DPZ) shares jumped in extended trading on Thursday after a filing revealed that Warren Buffett’s Berkshire Hathaway (BRK.A; BRK.B) had taken a stake in the world’s largest pizza chain.
According to Berkshire’s 13-F filing released by the U.S. Securities and Exchange Commission (SEC) late Thursday, the conglomerate bought nearly 1.3 million Domino’s shares that had a market value of about $550 million as of Sept. 30, its only sizable new equity holding during the latest quarter.
Domino’s shares have gained around 6% since the start of the year through Thursday’s close, significantly underperforming the S&P 500’s 25% return over the same period. The pizza chain’s shares fell sharply in July after it forecast weaker store openings and slowing sales in the second half of 2024.
The stock gained nearly 8% to around $470 in after-hours trading Thursday.
Below, we navigate the technicals on the Domino’s chart and identify important price levels worth watching out for.
Symmetrical Triangle Retest
Domino’s Pizza shares broke out above a symmetrical triangle earlier this month before finding selling pressure near the 200-day moving average and retracing towards the pattern’s top trendline.
However, the stock sits poised to resume its bullish price momentum on Friday following news of Berkshire’s stake in the stock.
Let’s take a look at three important overhead levels on the pizza maker’s chart and also point out a key support area that investors may be watching.
Important Overhead Levels to Monitor
The first overhead level to watch sits around $473, an area where the shares could encounter resistance near a trendline that connects the prominent April swing low and a series of similar trading levels on the chart prior to the stock’s mid-July earnings-driven plunge.
A move higher could see the shares rally to the $505 level. Investors may seek to lock in profits in this region near the April peak, which closely aligns with the May trough and early July countertrend high.
Further upside could fuel a move to around $535, a location about 23% above Thursday’s closing price that is likely to attract significant attention near a double top that formed on the chart between April and June.
Key Support Level to Watch
During pullbacks, investors should keep a close eye on the $435 level. This area on the chart may attract buying interest near the symmetrical triangle’s initial breakout area, which also roughly aligns with a range of comparable trading levels dating back to late January.
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As of the date this article was written, the author does not own any of the above securities.
