KO Chart Is Looking OK

 | Mar 16, 2017 | 2:00 PM EDT
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Robert Moreno is a regular contributor to Real Money Pro. Click here to learn about this dynamic market information service for active traders.

Shares of Coca-Cola (KO) broke above a three-month double-bottom base resistance level in the $41.75 area early this month. They continued through the 200-day moving average, then pulled back to retest the former resistance-turned-support line, and having completed that process, now look like they are beginning the first phase of an intermediate-term rally. 

The relative strength index and moving average convergence/divergence have been tracking higher since the February low, indicative of short-term positive trend and momentum. Chaikin money flow has been improving along with price and is well into positive territory, suggesting this rally is attracting institutional buying. 

KO is a buy at its current level using a position size that accommodates an initial stop under the $41.75 level. There will be some backing-and-filling along the way, but the gap below $43.75 is the pattern target price objective.

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