No Coke – Pepsi

• Posted by Greg Harmon
• on April 17th, 2013

Coca Cola has been blowing the lights out. Its stock price is at 15 year highs. But what to do if you can’t get Coke, only Pepsi? Well they report earnings in the morning and to be prepared take a look at the chart below.

This stock is set up to roll over from many different indicators. The consolidation at the top recently is just past an AB=CD pattern target at 78.50. It is breaking a trend support level in the Relative Strength Index (RSI) and the Moving Average Convergence Divergence indicator (MACD) is rolling lower. It is also a bit extended from the 50 day Simple Moving Average (SMA). If it is to pull back there is support lower at 77.22 and 76 followed by 74.75 and 72.80. The 38.2% Fibonacci retracement is also in the mix then at 71.04.

But many of those indicators could also be masking a bullish case. For instance if the RSI were to reverse back higher here it would create a Positive RSI Reversal with a target of 83.31. that would be above a 81.67 target if the CD leg extended to 1.27AB and close to a 1.382AB extension. A 3 Drives higher would also complete at 81.80.

To round it out, the two day options for April Expiry are forecasting a move just over $1.00 for a range of 77.80 to 79.90.

Now you are set to play this post earnings. Upside targets of 79.90, 80.44, 81.67-81.80 and 83.31. Downside targets of 77.80, 77.22, 76, 74.75, 72.80 and 71.04. Go get a cheeseburger and chips.

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