Grab Some Coke and Smile

• Posted by Greg Harmon
• on March 19th, 2013

Coca-Cola, $KO, has had a nice steady grind higher since the market lows in 2009. Helped by a 2.9% dividend yield and the backing of Uncle Warren it seems to just go up. We took a stab at it into February earnings with a no cost structure that ended up giving no return as well. So be it. But it stayed on the radar and here is the reason why. Looking at the weekly chart over the last 25

years from an Elliott Wave perspective shows the beginning of Wave (5) of Wave iii of Wave III. All of that means that the analysis is looking for upside from the present level. A comparable move to the first wave would take it to 46.15 and 161.8% of that to 52.50. Both work. Additionally the 3 box-reversal Point and Figure Chart (PnF) is showing a price objective of 48.50. Both of these are

longer term views with the PnF unconstrained by time, so we need a trigger. And that came Tuesday in the daily chart. A quick glance shows the price breaking above the 2 week channel at 39.15. This gave the signal to start a long for a play to the target higher. This is not a set it and

forget it trade. We entered buying June and August 40 Strike Calls and will likely trade around them as the price moves to both protect the positions and enhance profits where possible. So why don’t you join us? Grab some Coke and smile.

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