Coca-Cola (KO) is set to report its second-quarter earnings on Tuesday. With the indicators looking mixed-to-bullish Monday, the most likely course for prices should be to the upside, and Jim Cramer said on "Mad Money" Friday that the beverage maker was steady, if unexciting.
Maybe we should add some rum to celebrate?
In this daily bar chart of KO, below, we can see that buyers were active in the $44-$45 range in July, August, October, February and March. We know this because prices only declined below $45 from just a day or two, and the daily On-Balance-Volume (OBV) line moved higher, telling us that buyers were being more aggressive.
The rally started in March and prices broke out the upside in June. The trend-following Moving Average Convergence Divergence (MACD) oscillator has been in a take profits mode from early June.
In this weekly bar chart of KO, below, we can see that prices are above the rising 40-week moving average line. Trading volume was slowing this year, but the weekly OBV line kept rising. The weekly MACD oscillator is in a bullish mode and pointed up from the zero line.
In this Point and Figure chart of KO, below, we can see an upside price target of $61.37.
Bottom line strategy: Because I prefer to buy strength, I would go long on KO or add to longs in KO on strength to $52.57. Risk a close below $50.25 and look for gains to the $61 area.