Domino’s Pizza: Trend changing price action points to 280p

Domino’s Pizza (DOM) has clearly been a massive success on both a fundamental and technical basis for many years. It still continues in this vein, and therefore anyone attempting to call time on the bull run, or even begin to suggest that the group may be running out of steam, is likely to come a cropper. However, the advent of the likes of Deliveroo, Hungry House, Just Eat (JE.), and many others does beg the question as to whether life will start to be rather more difficult for Domino’s in the future. This point is underlined by the latest failure for the shares back below the 200 day moving average now at 345p. A change of trend is also flagged by the lower highs and lows seen over the past month.

This latest technical failure would suggest that at least while there is no end of day close back above the 200 day line we could suffer a test of support back to the main September uptrend line from last year shown in red at 320p. While the likelihood is that this will be the limit of any downside for Domino’s shares, the risk is that a weekly close below the 2015 uptrend line could lead the stock as low as a May support line projection at 280p – even if the big bull run here resumes after that.