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Sunday's Bonus Content Darden Restaurants, Inc.: This is What a Strong Signal Looks LikeWritten by Thomas Hughes. Originally Published: 12/23/2025. 
Article Highlights - 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 presenting a potential trend-following entry in late December after a sharp pullback during 2025. The core thesis is straightforward: the long-term uptrend appears intact, momentum indicators are resetting, and fundamentals—combined with heavy 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 President Trump's official salary is $400,000 per year... his tax returns reveal he's been collecting up to $250,000 PER MONTH from one hidden source. Until recently, most Americans couldn't touch the type of investment that makes up this investment. But thanks to Executive Order 14330, that just changed. If you love investing in disruptive new companies... Discover how to invest in the fund Trump uses to collect this income >> Weekly price action for DRI has been in an uptrend since 2014, interrupted primarily by COVID-19 volatility. More recently, a strong 2024 uptrend broke price 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 supported by growth, margin strength, and aggressive capital returns. Price action in 2025 has been less favorable, with the stock falling about 25% from its peak to the November 2025 low. Still, the long-term uptrend remains unbroken. Although the drawdown was painful, it did two useful things for trend followers: it pulled price back toward long-term support and allowed momentum indicators to unwind from extended conditions. That unwind reset indicators such as the moving average convergence divergence (MACD) and stochastic, and let a key exponential moving average (EMA) catch up to price action. The long-term reference here is the 150-week EMA, which has aligned with the DRI uptrend line for years. The takeaway in late December is that support at this long-term indicator is holding, setting the stage for a rebound that has already begun. 
The MACD and stochastic, which measure momentum and trend, are showing bullish crossovers consistent with a technical trend-following entry. The recent price rebound, combined with those crossovers, suggests an uptrending market that could retest prior highs and potentially move higher in 2026. Investors should note, however, that late-December action has reached a nearby ceiling that must eventually be cleared. The Next Hurdle: Reclaiming the 150-Day EMA to Confirm Accumulation Even with improving momentum, the chart still faces a clear test: reclaiming the 150-day EMA. Many traders treat that line as a proxy for intermediate-term accumulation. When price sits below it, rallies often stall; when price moves above it and holds, it typically signals that dip buyers have returned. At the moment the market appears to be digesting the rebound that followed the most recent earnings release. 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 fiscal Q2 (FQ2) results showed year-over-year revenue growth accelerating to more than 7%, outperformance versus expectations, and notable margin strength driven by core operations and comp-store sales. Cash flow and capital returns were healthy as well, including the 3.1% yielding dividend and ongoing share buybacks. Buybacks have already reduced the share count by about 1.2% in the first fiscal half and are expected to remain robust in the second half. While restaurant-sector results helped set the tone, analysts and institutions are steering the market. The FQ2 release prompted several price-target increases and upgrades, supporting a Moderate Buy rating and roughly 20% upside in consensus forecasts. Institutional investors own more than 90% of the stock and were net buyers in 2025, with about $2 in purchases for every $1 in sales. With that backdrop, downside appears limited and upside potential meaningful.
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