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This Month's Exclusive Story Darden Restaurants, Inc.: This is What a Strong Signal Looks LikeSubmitted by Thomas Hughes. First Published: 12/23/2025. 
Summary - Darden Restaurants is testing long-term trend support after a steep pullback, creating a potential trend-following entry setup.
- Recent quarterly results showed solid sales and same-restaurant sales growth, alongside continued dividends and buybacks.
- Heavy institutional ownership and net inflows suggest support if the stock confirms a breakout back above key moving averages.
Darden Restaurants, Inc.'s (NYSE: DRI) stock is flashing a potential trend-following entry in late December after a sharp 2025 pullback. The core thesis is straightforward: the long-term uptrend looks intact, momentum indicators are turning, and fundamentals—paired with institutional positioning—create a credible path to market-beating total returns in 2026 if the stock clears nearby resistance. Darden Restaurants Pulls Back to Trend-Following Entry Point in Q4 While headlines focus on Tesla's car sales, tech analyst Jeff Brown says the real story is Tesla's role in a $25 trillion AI revolution — one that Nvidia's CEO himself has called a "multi-trillion-dollar future industry" — and he's uncovered a little-known stock 168 times smaller than Nvidia that could be positioned to ride this breakthrough. Click here now to see the full report Weekly price action for DRI stock has been in an uptrend since 2014, interrupted mainly by COVID-19 volatility. More recently, a robust 2024 rally broke price out of an Ascending Triangle pattern (where a stock consolidates with flat, equal highs but progressively higher lows) and set a new all-time high. That move was supported by fundamentals, including growth, margin strength, and capital returns. In 2025 the price action was less straightforward: the stock fell about 25% from its peak to the November 2025 low. Despite that pullback, the long-term uptrend remains intact. That drawdown wasn't pleasant, but it did two useful things for trend followers: it pulled price back toward long-term support and let momentum gauges unwind from extended conditions. Specifically, indicators such as the moving average convergence divergence (MACD) and stochastic have reset, showing room for a renewed rally, while a key exponential moving average (the 150-day EMA) has had a chance to catch up with price action. The 150-day EMA has aligned with DRI's uptrend line for years; in late December that support is advancing and helping set the stage for a rebound that has already begun. 
The MACD and stochastic, which measure momentum and trend, point to a technical trend-following entry. The price rebound, together with bullish crossovers in stochastic and MACD, constitutes that entry signal and suggests the market can retest current highs and potentially move higher in 2026. Traders should note, however, that the late-December rally hit a nearby ceiling that the stock will need to clear convincingly. The Next Hurdle: Reclaiming the 150-Day EMA to Confirm Accumulation Even with improving momentum, the chart still presents a clear test: reclaiming the 150-day EMA. Many investors treat that line as a proxy for intermediate-term accumulation. When price stays below it, rallies often stall; when price gets back above it and holds, it typically signals that dip buyers are back in control. At the moment, the market appears to be digesting the rebound that followed the most recent earnings catalyst. A clean push above the 150-day EMA—followed by a successful retest—would add confirmation for traders who want more than an initial bounce. Earnings Catalyst: What Darden Just Reported and Why It Matters The earnings results for fiscal Q2 (FQ2) showed year-over-year growth accelerating to more than 7%, outperformance versus expectations, and strong margins driven by core business strength and comp-store sales. Cash flow and capital returns also looked healthy, including the 3.1% yielding dividend and ongoing share buybacks. Buybacks have reduced the share count by about 1.2% in the first fiscal half and are expected to remain meaningful in the second half. While broader restaurant-sector results helped set the tone, analysts and institutions are driving the move. The FQ2 release prompted multiple price-target increases and upgrades, supporting the Moderate Buy rating and roughly 20% upside consensus, and institutional investors have been aggressive buyers. Institutional holders now own more than 90% of the stock, and 2025 trading shows roughly $2 in purchases for every $1 in sales. With that support, DRI's downside appears relatively limited while its upside potential remains attractive.
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