The stock price of Beyond Meat (BYND) has gapped sharply higher Tuesday morning as traders reacted to the news of a new partnership with Pepsi Co. (PEP) to make plant-based foods and drinks together.
We looked at BYND on Jan. 15 and wrote that, "The overall impression I get from these charts of BYND is that more weakness is possible. Avoid the long side for now." But we also noted that, "In this daily Point and Figure chart of BYND, below, we can see an upside price target of $201 but we can also see that a trade at $148 is needed for an upside breakout." Prices traded above $146 yesterday and jumped as high as $221 this morning, so let's check out the charts again.
In this updated daily bar chart of BYND, below, we can see that prices rallied strongly on Monday and gapped sharply higher. Prices are below their opening Tuesday, giving us a red real body, at least for now. BYND above the bottoming 50-day moving average line and above the rising 200-day line. Trading volume has been increasing this month and the On-Balance-Volume (OBV) line has turned upward and is close to making a new high. The Moving Average Convergence Divergence (MAC) oscillator has turned to the upside for an outright-buy signal.
In this weekly Japanese candlestick chart of BYND, below, we do not have today's action plotted and we will have to wait for Friday. Meanwhile, we can see that prices are above the rising 40-week moving average line. The weekly OBV line has started to improve again and the MACD oscillator has narrowed and is closer to a bullish crossover.
In this daily Point and Figure chart of BYND, below, we see that the price gap is gone and we can also see a potential price target in the $396 area.
Bottom line strategy: Interesting how a new business deal can turn a chart so quickly. The key question now is how to buy BYND and what to risk. I would feel more comfortable if we could buy BYND around $180 expecting that some but not all of today's gap might get filled. If we can buy BYND around $180 I would risk to $150. $400 is our longer-term price target now.
