.

Swing Trade Idea (YUM) – December 22, 2022

Our bearish trade for Thursday, December 22nd is Yum! Brands, Inc. (YUM). YUM is part of the Consumer Discretionary Sector, which has performed at -5.04% over the last month, with YUM overperforming relative to its sector at 3.84% over the same period. 

YUM broke above a key level at $128, after an extended rally to a point of exhaustion. It is currently showing weakness and we, therefore, believe that YUM will retrace lower, with the next support at around $120. As a counter-trend trade, we believe that this provides a good risk/reward bearish entry.

As a close, if YUM were to trade above $130 for multiple days, this would invalidate our analysis and we will consider cutting losses on the trade. We also will consider cutting losses on this options trade if the value of the vertical spread moves below $0.90.