Shake Shack is Acting Like an Emerging Bull Market Growth Leader

With bears squandering a multitude of opportunities this week (and indeed this year) to break the broad market lower for a much deeper correction than anything we have seen in at least a few years, one must wonder, then, which stocks would potentially lead a new leg higher. 

Naturally, "FANG" names, plus BKNG (Priceline) and some payment processor monsters like SQ PYPL, not to mention AI studs like NVDA, all come to mind. 

But there likely must be more to it than those names, should the bull case prevail within a reasonable period of time. 

Up-and-comers like TWTR TWLO make sense, as do the suddenly-hot cybersecurity stocks in 2018. 

However, the casual dining plays seem to be a relative strong group this year which has been consistently overlooked. While restaurant stocks were almost never the typically high beta momentum favorites of hot money traders, save CMG a few years back, it would almost assuredly be a mistake to currently overlook some of significant technical progress being made it the sector at-large. 

As examples, let us take two names we have been noting for Members. Wingstop (WING) had one of the strongest charts in the entire market before earnings, and is now only getting strong with an 11%-plus rally today after an impressive report. 

And Shake Shack is another up-and-coming fast/casual brand with tons of room to expand its growth strategy both here in the U.S. and overseas (similar to WING). 

SHAK is a name which broke the hearts of many bulls who were too quick to jump the gun after its IPO in 2015. Simply put, the market was not rewarded growth strategies back then which seemed more abstract than real. 

However, after its latest report, SHAK's strategy is very much on the level and will likely only strength, especially given how well the firm integrates digital communication with consumers. 

On the SHAK weekly chart, below, a bit zoomed-out dating back to 2015, we have a serious base bottom breakout into free air after years of stiff resistance into rallies. SHAK remains one of the most heavily-shorted names in the market, and I view any dips as buying opportunities until further notice and the brand and strategy have all the hallmarks as being in the right place at the right time.