Leading restaurant stock, Shake Shack Inc (SHAK), has been coming under selling pressure since early 2021. On January 27th, 2021, the popular restaurant stock traded as high as $138.38 a share. Since that major top, the shares have declined below their 200-week moving average and now trade at $67.02 a share. This puts the chart in a weak technical position and usually signals lower share prices ahead. Obviously, many restaurant stocks have been battling the covid-19 rules in different states and this could continue to weigh on the share price in the near term.
The next major support level for the stock will be around the $55.00 level. This key support area is where the stock broke out in August 2020. Often, when a stock pulls back from such a high share price it will be defended around the next prior breakout level. There are also a couple of other supporting factors around the support area making this a very attractive long side trade when tested.
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