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Additional Reading from MarketBeat.com Darden Restaurants, Inc.: This is What a Strong Signal Looks LikeSubmitted by Thomas Hughes. Article Published: 12/23/2025. 
At a Glance - 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. (NYSE: DRI)'s stock is flashing a potential trend-following entry in late December after a sharp 2025 pullback. The core thesis is simple: 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 can clear nearby resistance. Darden Restaurants Pulls Back to Trend-Following Entry Point in Q4 You can feel it — something in the economy has shifted. The headlines say everything's fine, but the rising costs, widening divide, and growing frustration tell a different story. After three decades studying financial systems, I've never seen pressure build like this.
I've spent the past year following the signals, and what I uncovered points to a major break in the old economic order — one that's taking shape far faster than most people realize. I lay out the full picture in a new documentary. Watch the full briefing here Weekly price action for DRI stock has been in an uptrend since 2014, with the COVID-19 selloff as the primary interruption. More recently, a robust 2024 advance broke price action out of an Ascending Triangle Pattern (a consolidation with flat highs and progressively higher lows) and set a new all-time high. That move was driven by fundamentals — growth, margin strength and capital returns. The 2025 price action is less obviously bullish: the stock fell about 25% from its peak to the November 2025 low. Still, the long-term uptrend has not been broken. The drawdown wasn't pleasant, but it did two useful things for trend followers: it pulled price back toward longer-term support and allowed momentum gauges to unwind from extended conditions. That reset let indicators such as the moving average convergence divergence (MACD) and stochastic regain constructive posture and allowed a key exponential moving average (EMA) to catch up with price. On the weekly chart, the 150-period EMA (the 150-week EMA) has acted as a long-term reference for buy-and-hold support and has aligned with DRI's uptrend for years. In late December that support was advancing, setting the stage for a rebound that has already begun. 
The MACD and stochastic, both momentum and trend measures, point to a technical trend-following entry. The recent price rebound, combined with bullish crossovers in stochastic and MACD, constitutes the entry signal and suggests the market can retest its recent highs and potentially move higher in 2026. That said, late-December action has already encountered a short-term ceiling that the stock will need to clear to confirm further upside. The Next Hurdle: Reclaiming the 150-Day EMA to Confirm Accumulation Even with improving momentum, an obvious test remains: reclaiming the 150-day EMA (the 150-period EMA on the daily chart). Many traders use that line as a proxy for intermediate-term accumulation. When price is below it, rallies can stall; when price moves back above it and holds, it often signals that dip buyers are regaining control. At present 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 provide additional 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 just over 7%, outperformance versus expectations, and substantial margin strength driven by the core business and comp-store sales. Cash flow and capital returns were healthy as well, including a 3.1% yielding dividend and active share buybacks. Buybacks have meaningfully reduced share count — roughly 1.2% in the first fiscal half — and are expected to remain robust in the second half of the fiscal year. While consumer trends in restaurant stocks helped set the backdrop, analysts and institutions largely drive the market reaction. The FQ2 release prompted several price-target increases and upgrades, reinforcing the Moderate Buy rating and an implied upside near 20%. Institutions are buying aggressively — they own more than 90% of the float, and 2025 activity has amounted to roughly $2 of purchases for every $1 of sales. With that dynamic, DRI's downside looks more limited while upside potential appears ample.
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