KO was on my list for quite some time and after the recent pullback towards the $50 area I decided to give it a shot.
From a fundamental perspective the stock is not cheap compared to other consumer staples, however I like the stock offers a solid 3.3% div . yield. It's a household name with global exposure and a well diversified product offering. In short, a solid all weather stock, suitable for a long term holding.
Technically I use the recent pullback as entry level for the following reasons;
- $50 is a psychological and traded short resistance, turned that has held over the past 3 trading days
- The formation of a , followed by a forming on a higher low shows further confirms that buyers and sellers seem to balance out at this level and the slide has halted (for now)
- is still a strongly negative signal, however it seems somewhat stretched and I expect a reversal around these levels
- is week and points towards a positive reversal
- One could argue to spot an inverse pattern, a per-se sign. However, I would counter that the stock is not in an overall downtrend and therefore the pattern is not valid (yet).
Resistance on the climb back up is met pretty much in 1$ steps.
- Long @ $50
- SL @ $47
- Take profit @ $57.80
I might lift the TP and just let the stock run as a long term dividend play
***This is my personal view and does not represent investment advice. Risk management is key and do not risk what you can't afford to loose***
RSI starts to look oversold as is the MACD. However it might take a few more trading days to see if a turnaround will form.
Holding on for now, maintaining my SL at $47
Will monitor closely and maintain the 47 SL
closely watching the $51/52 area, pullback to initial support would likely trigger me to start reducing my position.