Time to buy a Pepsi

• Posted by Greg Harmon
• on August 4th, 2015

Lately I have seen Pepsico ($PEP) described as a snack food company. And with that they are somehow benefiting from falling oil prices. I had to stop what I was doing for a minute after that one. I guess they do sell a lot of snacks. But they are also a water company with Aquafina.

When I was young they were known solely as the the maker of Pepsi soft drinks. With all this expansion into the consumer maybe it should not be a surprise that the company is doing well. But the chart of the company’s stock price shows that it is also doing well. In fact, it looks like a great time to grab some Pepsico stock.

During the back half of 2013 and into the first quarter of 2014, Pepsico stock went through a consolidation pattern. It traded in a channel for 7 months and then the price action started to tighten against the downside support of the channel. This made for a descending triangle. it broke above the top resistance of the triangle in early March 2014 and moves $22 higher, touching $100 in the process.

Since the beginning of December the stock has been going through a variation of that same pattern again. That was until today. The stock is now moving over that falling resistance again. And with the prior move up as a guide, sets a target of 115.

The momentum indicators support more upside price action as well. The RSI is in the bullish zone and rising. The MACD is about to cross up again after a short pause in its move higher. Using the May high as a trigger for a conservative entry or getting in now against a stop at the July 27 low gives a great reward to risk ratio for this stock.

Get my ebook, Markets for 2015 and Beyond, a long term forecast with all proceeds going to charity.

Want to learn more about Dragonfly Capital Views?
Dragonfly Capital Views Performance Through July 2015 Expiry and sign up here

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

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