Should you buy a slice of Domino's Pizza shares?

This mid-cap's recent results have taken a slump. Our chartist sees if they are worth tucking into.

The very existence of these complex 'toast and cheese' outlets remains a constant puzzle*.

So it came as no surprise to see their share price experience a bit of a calamity this year, presumably due to European foodstuffs being off the Brexit menu?

Who knows but despite recovery during the session, the 7th May witnessed the market driving the pizza price down.

• Why Domino's Pizza sell-off was overcooked

Domino's (LSE:DOM) share price opened at 233p, down from a closing price of 260p before the bank holiday weekend. Despite a miracle recovery during the session, we were not entirely convinced as the market had not spiked the price down at the open, instead opting to gap (manipulate) the share down by 27p, virtually 10% of its value.

Though Domino's eventually closed the day at 254p, down just 1.46%, we've a strong suspicion the market wants Domino's price to reverse.

The immediate situation suggests traffic below 229p should lead to an initial 213p and a probably short lived bounce.

If this target level is broken on the initial surge, our secondary calculates at 182p, hopefully with the chance of a longer term real bounce.

Unfortunately, reversal such as this will take the price into a region where negative news could easily drive the price down to 122p.
 
As the chart highlights, the price has proven rather resilient in its relationship to the longer term red uptrend. This complex series of movements now means we require the share to exceed 288p to convince it's breaking trend and heading upward.

In such an event, our initial calculation is at 311p with secondary, if bettered, a more useful 341p.
 
Unfortunately, for now, we suspect it's going to head to 182p as the next major point of interest.

Source: Trends and Targets      Past performance is not a guide to future performance

* As someone who's gluten intolerant, I've literally never eaten pizza!

Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.

Alistair Strang is a freelance contributor and not a direct employee of Interactive Investor. All correspondence is with Alistair Strang, who for these purposes is deemed a third-party supplier. Buying, selling and investing in shares is not without risk. Market and company movement will affect your performance and you may get back less than you invest. Neither Alistair Strang, or interactive investor will be responsible for any losses that may be incurred as a result of following a trading idea.