CoCa-Cola Gaps Up After Earnings | Technical Analysis

The Coca-Cola Co. stock (NYSE: KO) opened with a positive gap yesterday, after the company announced better than expected quarterly earnings results. The gap took the stock above the peak of July 16th, at 56.65, but participants abandoned the share after it hit 57.55, allowing it to retrace back below 56.65. However, bearing in mind that the stock continues to trade above the upside support line drawn from the low of January 29th, we will continue to consider the medium-term outlook to be positive.

The current retreat may continue for a while more, but we see decent chances for the buyers to take charge again from near the 55.20 area, or even slightly lower, near the aforementioned upside line. If so, we could see another test at around 57.55 soon, the break of which would confirm a forthcoming higher high and perhaps pave the way towards the high of March 5th, 2020, at 58.25. If they are not willing to stop there, then extensions towards the 59.00 zone could be possible. That area is defined as a resistance by the high of the day before.

Shifting attention to our short-term oscillators, we see that the RSI turned down after hitting its 70 line, while the MACD, although above both its zero and its trigger lines, shows signs that it could fall back below its trigger soon. Both indicators detect slowing upside speed and support the case for some further retreat before the next leg north.

In order to abandon the bullish case, we would like to see a dip below 54.55. This may take the stock below the pre-discussed upside line and may initially open the path towards the low of July 6th, at 53.55. The next support to consider may be the 52.50 barrier, marked by the lows of April 1st and 5th, the break of which could allow the fall to run towards the low of March 25th, at around 51.20.


The content we produce does not constitute investment advice or investment recommendation (should not be considered as such) and does not in any way constitute an invitation to acquire any financial instrument or product. The Group of Companies of JFD, its affiliates, agents, directors, officers or employees are not liable for any damages that may be caused by individual comments or statements by JFD analysts and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his investment decisions. Accordingly, you should seek, if you consider appropriate, relevant independent professional advice on the investment considered. The analyses and comments presented do not include any consideration of your personal investment objectives, financial circumstances or needs. The content has not been prepared in accordance with the legal requirements for financial analyses and must therefore be viewed by the reader as marketing information. JFD prohibits the duplication or publication without explicit approval.

There are risks involved with trading of cash equities. Past performance is not indicative of future results. You should consider whether you can tolerate such losses before trading. Please read the full Risk Disclosure.

Copyright 2021 JFD Group Ltd.