Heading for a Beer, What Can I Get Ya?

This is the best party line ever. No getting up yourself interrupting your conversation, or losing your place on the couch, maybe missing the one key play of the game. But it can also be stressful. Do you want a full bodied beer like a Red Hook Ale from Craft Brewers (ticker:$HOOK) or Sam Adams Boston Lager (ticker:$SAM) since you are only having one (ok three). Or maybe a smooth beer with carefully brewed taste like a Molson (ticker:$TAP). Or will you just settle for a good old Budweiser, the American King of Beers, now owned by AB-InBev of Belgium (ticker:$BUD) because it comes in a 24 pack. How do you decide? How about by looking at their charts?

BUD

Let’s start with The King of Beers. BUD has been a top 10 pick recently and is now about to test the previous high from October 2010 at 63.56. If it can get to new highs then there is a target on a Measured Move (MM) to 67.08 and a Fibonacci 123.6% extension higher at 68.56. The Relative Strength Index (RSI) is strong and the Moving Average Convergence Divergence (MACD) indicator is increasing supporting a move higher. Watch the spinning top though as a potential reversal signal if Wednesday confirms lower. All in all a solid choice. But what about a Molson?

TAP

TAP looks good for higher prices as well. It is pushing on the top of the Bollinger bans (BB) with a rising RSI and MACD after retesting and holding the 47.60 Fibonacci level. There is some resistance higher near 50 and then the full retracement at 50.79, but also a good choice of beverage. Personally I favor the craft beers as they brew in smaller batches with more flavor, so lets look at them.

HOOK

HOOK has had a rising trendline as support since October, with all of the Simple Moving Averages (SMA) sloping higher. The RSI is rising after bouncing off the mid line, but the MACD is crossing lower. Perhaps warning of a pullback to the trendline. Watch 8.8 as support and buy on a hold at the trendline, for a ride higher to teh previous top at 9.94. Expect some intraday volatility as craft brewer stocks are like the beers themselves, made in small batches, so it trades thin and can move around a lot. So maybe something in between is a little better like Sam Adams.

SAM

SAM went through a basing period in descending triangle from June until October 2010 before it moved higher. It appears read to repeat this move. The previous move was $36 so on a MM you could look for a target of 125 on a break higher. There is resistance along the way at 100 and the target of the pattern break at 105. The rising RSI and MACD, along with the tight BB that look to be starting to expand suggest this should be your choice of beers and is what I am going to get right now. But then everyone has their own tastes. What do you decide?

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