The King of Beers FTW!
- Posted by Greg Harmon
- on July 4th, 2012
When you hear the phrase ‘The King of Beers’ you automatically think of the Clydesdale’s pulling a wagon of Budweiser to a local pub. Like that has happened in the last 50 years. Hey that’s ok, because it is the 4th of July, an American celebration of Independence, and we can have our beer delivered in a truck if we damn well please. America, Freedom! Well in fact it is not even an American company any more. Anheuser-Busch InBev, $BUD, the Belgian brewing conglomerate produces your working man’s Bud now. But since the label on the can looks the same we can forget that and grab a few cold brewski’s for the barbeque and the fireworks to follow. But if you look at the chart of the stock it is making its own fireworks. Gapping higher last week and now
Anheuser-Busch InBev, $BUD, Daily
consolidating just under 80, it looks ready to explode higher, like an M-80. The daily chart is getting a bit overbought technically, and with the extension to 12% above the 50 day Simple Moving Average (SMA), you should not be surprised if a pullback occurs, but this can be worked off through time as well, so do not get caught betting short. What happens to it when it is done consolidating? One view comes from the 3 box reversal Point and Figure chart. This ‘tick’ chart gives a bullish price objective of 108. There is no timeframe associated with that but flipping to the
monthly chart below and using the rough regression line down the middle of the shaded zone gives an estimate of 2 years. Even if it takes a bit longer it carries a 1.6% dividend yield to keep you happy while you wait. All told this is one M-80 you want to hold before it explodes.
Anheuser-Busch InBev, $BUD, Monthly
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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.blog comments powered by Disqus
Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
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