This week marks the beginning of the real earnings season, Jim Cramer told his Mad Money viewers Friday. That's when we'll start to see the true impact of inflation and the economic reopening. Inflation is surely a negative, Cramer said, but the reopening is so strong it will likely carry us through.
Coke has no snack business, but should still do well as restaurants reopen, Cramer pointed out.
(For more on KO, see Investing in Coca-Cola Is a Matter of Taste)
KO was trading higher recently as it appears to have beaten expectations on earnings and revenue. Let's check out the charts again.
We looked at KO on April 1 and wrote that "So back to the question. Is KO drinkable here? I am going to be a little Delphic. I would want to see how KO behaves on a pullback to the $51.50 area. Will buyers become more aggressive? Or should I wait for an upside breakout over $55 to be more confident? Grab a bottle of rum and stay tuned."
In this daily bar chart of KO, below, we can see that prices corrected lower into late January. KO has moved higher from late January and is trading above the rising 50-day moving average line and the rising 200-day moving average line.
The On-Balance-Volume (OBV) line shows improvement from the middle of January and confirms the price gains. The Moving Average Convergence Divergence (MACD) oscillator is above the zero line and could soon turn higher for a fresh outright buy signal.
In this weekly bar chart of KO, below, we can see that prices are in an uptrend from the March 2020 low. Prices are trading above the rising 40-week moving average line.
The weekly OBV line is very bullish in that it has been going up the past three years and hardly dipped during the first quarter of 2020. The MACD oscillator just turned upwards for a new outright buy signal.
In this daily Point and Figure chart of KO, below, we can see that a trade at $54.70 is a fresh upside breakout and the $58 area is our nearest price target.
In this weekly close only Point and Figure chart of KO, below, we can see a $67 price target.
Bottom line strategy: Traders could go long KO or add to existing longs on strength above $54.70. Risk to $51 while the $67 area is our price objective.