Molson Coors: Keep a Cold One in Your Fridge, and Keep an Eye on the Stock

 | Feb 17, 2017 | 9:30 AM EST
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Molson Coors Brewing (TAP) has made no sustained upside progress in the past 12 months. Prices have tested the underside of the 200-day moving average line in the past three months, but they have been unable to breakout on the topside.

The current uptick could meet the same fate. Let's look closer.

In this one-year daily bar chart of TAP, below, we can see that the $94 level has become important over the past three months. Around $100 and above has also become a key level since November. Buyers have entered around $94 and rallies have stalled around $100 -- and the underside of the 200-day moving average line.

Recently, the 50-day moving average line has turned up, but the On-Balance-Volume (OBV) line is not (yet) showing aggressive buying. The runup this week has quickly turned to overbought, looking at the slow stochastic indicator (lower panel).

In this three-year weekly chart of TAP, above, we can see that it has been able to rally in the past, but now prices are below the cresting, 40-week moving average line. The daily OBV line was neutral, but on this weekly timeframe the OBV has been declining since early October. The Moving Average Convergence Divergence (MACD) oscillator is in bearish territory below the zero line.

Bottom line: TAP will not stay between $100 and $94 forever -- that much we know. A breakout above $100 is not likely to go far without more aggressive buying. A breakdown below $94 will probably generate further selling, and the $94 to $100 area would become resistance. Have a beer, but keep watch on these levels.

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