Anheuser-Busch InBev looks good, Buying some Bud

Anheusuer-Busch Inbev, $BUD to you and me, has been pulling back from a peak over 116.50 in mid June. With the broad market pullback it raises the question of whether or not this stock has run its course lower. From a technical perspective there are good reasons to head out to you broker and pick up a six pack of $BUD right now.

bud

The price chart of BUD over the last 25 months is all you need to convince yourself. First notable pullbacks over this horizon have resulted in moves higher between $20 and $25 when the stock has reversed. These moves up have started each time that the RSI has touched the technically oversold level at 30. The final characteristic is that the MACD has crossed up after reaching an extreme to the downside.

This stock could turn lower and crash another $20. But for a trader this gives a perfect set up. The RSI is moving up after touching 30 again. The price is holding and at the 200 day SMA. And the MACD is turning higher, and about to cross up. Getting long now against a stop at a new low under the 200 day SMA offers a great reward to risk ratio. I bought some today at 108.55.

Get my book, Trading Options: Using Technical Analysis to Design Winning Options Trades.

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