PepsiCo, Inc. (PEP), which has beaten bottom-line estimates when it reported results on April 26, but the stock remained below its semi-pivot at $137.81. The stock subsequently fell below its quarterly pivot at $135.03, and its quarterly pivot at $135.03, but they have held their 50-day simple moving average (SMA) at 129.40.
PepsiCo shares closed last week at $130.14, down from 4.8% in 2020. The stock is in correction territory at 11.6% below its Feb. 18 high of $147.30 and is in bull market territory to 28.3% above its March 20 low of $101.42.
The company has a diversified portfolio from a menu of drinks and snacks, including Frito-Lay, Gatorade, Quaker, and Tropicana. PepsiCo has beaten earnings per share (EPS) estimates in the course of the last five quarters. The company has a rising P/E ratio of 23.54 with a favourable opinion dividend yield of 2.89%, according to the trends.
The daily chart for PepsiCo
The daily chart for PepsiCo shows that the stock is above a gold cross, which was confirmed in August. 16, 2018, when the 50-day SMA rose above the 200-days SMA to indicate that higher prices will follow. Holding the 200-day SMA between Sept. 5, 2018, and Jan. 30, 2019, has provided a buying opportunity for the shares.
This has given strength to the stock to define its intraday high of $147.20 on Feb. 18, 2020. This was a test annual risky level at $145.70 as an opportunity to reduce their holdings. From this high, the stock cascaded below her semi-pivot to $137.81, March 6, and below its 200-day SMA on the same day, the supply of the negative momentum from March 20 low of $101.42.
The V-Shaped rebound from 200-day SMA and the quarterly pivot at $135.03 on the 14th of April. The stock failed at its semi-pivot at $137.81 and returned below its quarterly pivot at $135.03, and its monthly pivot at $135.03. It is fairly volatile ride as investors could capture they understand how to use my proprietary analytics and the reading of the daily and weekly charts.
The weekly Chart for PepsiCo
The weekly chart for PepsiCo is neutral with the stock below its five-week modified moving average of $131.16. The stock is above its 200-week SMA, or the return to the average, to $117.39. The 12 x 3 x 3 weekly slow stochastic reading is increased from 63.20 this week, from 59.21 April 24.
Trading strategy: Buy PepsiCo stock on weakness to the 200-week SMA at $117.39, and reduce holdings on strength of the quarterly, half-yearly and annual risky levels at $135.03, $137.81 and $145.70, respectively.
How to use my value levels and risky levels: The closing price on Dec. 31, 2019, were inputs to my proprietary analytics. Half-yearly and annual, the levels are still on the charts. Each calculation uses the past nine closes in these time horizons.
The second quarter of 2020 the level has been established based on the 31 March, close by, and the level of the month of May was established based on the April 30 close. New weekly levels are calculated following the end of each week, and new quarterly levels occur at the end of each quarter. Half-yearly levels are updated in the middle of the year, while the levels remain in play throughout the year.
My theory is that nine years of volatility between the farm are to assume all possible bullish or bearish event for the stock are taken into account. To capture the volatility of stock prices, investors should purchase shares of the weakness of a plan, the value and reduce the holdings of the strength to a risky level. A pivot is a level value of the risk level that was violated in its time horizon. Hubs act as magnets that have a high likelihood to be re-tested prior to their time horizon expires.
How to use 12 x 3 x 3 weekly slow stochastic readings: My choice of using 12 x 3 x 3 weekly slow stochastic readings has been based on the backtesting of many methods of reading the stock prices of the momentum with the objective of finding the combination that resulted in the least number of false signals. I’ve been following the stock market crash of 1987, so I was happy with the results of more than 30 years.
The stochastic reading covers the duration of 12 weeks, high, low, and close for the stock. There is a row of calculation of the difference between the highest and the lowest compared to the farm. These levels are modified for a fast reading and slow reading, and I found that the slow playback will work best.
The stochastic reading scales between 00.00 and 100.00 with readings above 80.00 considered as overbought and readings below 20.00 regarded as oversold. A reading above 90.00 is considered to be a “swell parabolic bubble” of the training, which is usually followed by a decline of 10% to 20% over the next three to five months. A reading below 10.00 is considered to be “too cheap to ignore,” which is usually followed by a gain of 10% to 20% over the next three to five months.
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Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.