Houston is one of the most competitive restaurant cities in America and the Pappas family has set the standard there for over 20 years. If the Pappas brothers and the chart are behind Luby's, this stock could be a long-term winner. The last few months look like a capitulation phase that was only stopped when the Pappas brothers investment became public. The new reaction high places the bulls in control of the intermediate-term trend. After Wednesday's advance, the stock broke pennant resistance and could continue its advance to around 8-8.50.
Directional movement favors the bulls.
The ADX turned up in late Jan and recently moved above 25, signaling that a trend could be developing. There were signs of strength in late summer, but the stock gapped down after a warning. In addition, the restaurant group has been fairly strong in recent weeks. With the recent breakout above 6.50, I would look for the stock to advance to around 8 over the next few weeks. I believe there is excellent support around 5.5.