Coca-Cola (KO) Trading at 4 weeks After Mixed Quarter

Dow component The Coca-Cola Company (KO) is trading higher by more than 2% Tuesday pre-market session after the meeting of the second quarter of 2020 earnings per share (EPS) estimates of $ 0.42. Revenue fell a staggering 28% to $ 7.2 billion, which missed expectations by a small margin. Overall the unit is the number of cases has markedly decreased during the quarter, highlighting intense headwinds as a result of the COVID-19 pandemic. The company has chosen not to provide the year 2020 orientation, due to continued uncertainty.

Key Takeaways

  • Coca-Cola is the collapse of revenue is dependent on sites that have been closed due to the pandemic.
  • The company has refused to give the orientation exercise.
  • Investors have flocked to PepsiCo, while avoiding the shares of Coca-Cola.

The drink giant’s income is heavily indebted throughout the world in partnerships with restaurant, entertainment, sports, and sites that have been closed or limited due to the pandemic. The stock has struggled to recover since the first quarter of 40% of a fall, to the difference of PepsiCo, Inc. (PEP), who just beat second quarter of 2020 estimates by a good margin and trading is relatively close to the 2020 goal high. Coca-Cola’s rival, has benefited from a very popular range of home-snacks that include Doritos, Quaker Oats, Tropicana, and Chips Lay s.

Coca-Cola Weekly Chart (2013 – 2020)

Coca-Cola finally completed a return trip in 1998 high of $44.47 in 2014 and relaxed in a slight increase of the channel that has criss-crossed the state to the high several times in the third quarter of 2018. Committed bulls then took control, the generation of a bypass channel which has posted a record high of $60.07 in February 2020. The stock is then sold on global markets, at default, the multi-year breakout, before moving to four-year low in the mid – $30 in the month of March.

The first-quarter decline broke the channel support, while the rebound in June reversing again the resistance located in the upper part of $40. This level is roughly aligned with the .50 sale retracement level and the 200-day exponential moving average (EMA), generating a barrier that is unlikely to break after this morning’s mixed metrics. The weakness of buying interest also reduces the chances for an escape in the low $50, with the balance volume (OBV), the accumulation-distribution indicator of the collapse near the first quarter of the bottom.

What is a trading channel? A trading channel is drawn using parallel trendlines to connect a security’s support and resistance levels within which it currently sells. A trading channel can also be known as a price channel.

PepsiCo’s Weekly Chart (2009 – 2020)

PepsiCo stock fell to a six-year low in 2009, and entered in an upward trend, which has exploded to a new record high in 2013. In the Long term, the trend line guiding price action through most of the decade, with the support approximately aligned to the 50-month EMA. The stock has broke above the upper trend line in the year 2019, adding to the strong recovery of the pulse which has posted a record high of $147.30 in February 2020. The sale in March, failure of the breakthrough before finding support for a two-year low, just under the low of the trend curve.

The rebound in April, extending far into the .786 Fibonacci sale retracement level, which marks the highest in the last four months. The stock has been consolidating at the 50 day EMA and .618 retracement level from this time, carve out a potential bull flag continuation pattern. Unlike Coca-Cola, PepsiCo accumulation has soared in the third quarter, with a balance of volume of lifting to an all-time high. This bullish positioning predicts that the price will soon follow.

What Is The Accumulation? The Accumulation generally refers to a position size in an asset that increases over multiple transactions. The Accumulation can also refer to the set of adding positions to a portfolio. It can also refer to a general increase in the activity of sale of a property.

The Bottom Line

Coca-Cola has met with conservative second quarter of 2020, the earnings estimates on Tuesday morning, triggering a buy-the-news reaction, but a sharp drop in quarterly revenues could curb investors ‘ enthusiasm. As a result, rival PepsiCo looks like a better bet for long-term investors, especially with its competitive dividend yield of 3.07% compared to Coke 3.56%.

Disclosure: The author held no positions in the aforementioned securities at the time of publication.


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