The YUM short has broken down form a bearish pennant continuation pattern today. As with most breakdowns from bearish pennant patterns, just as with the move leading down to the pattern (aka the “flagpole”), prices have moved lower in a very impulsive manner since breaking below the pennant formation today. In the case of YUM, the bulk of the impulsive move leading up to the formation of the pennant came via a large gap down on the morning of Oct 9th. Coincidentally or not, the pattern measures right to the Feb 5th reaction low of 59.68. That level is smack in the middle of my first and second price targets and as such a distinct reaction low as that will often act as a support level, one might consider that level a sub-target or additional target where partial or full profits on the trade could be taken. YUM was originally shorted back on Sept 3rd on the break below the rising wedge pattern. T2 (57.09) is my current preferred swing target at this time.
