PepsiCo Inc. (PEP) reported better-than-anticipated quarterly earnings and revenue numbers Thursday morning and the stock is higher in early trading.
Let's get a tall glass and ice and, oh yeah, some charts and check things out on this Action Alerts PLUS holding.
In the daily bar chart of PEP, below, I can see that share prices have been trading above the rising 200-day moving average line since early June. If PEP rallies strongly enough Thursday we could see prices close above the 50-day moving average line.
The On-Balance-Volume (OBV) shows us strength since March and tells us that buyers of PEP have been more aggressive than sellers. The Moving Average Convergence Divergence (MACD) oscillator is just slightly below the zero line but that could change with Thursday's rally in the share price.
In the weekly Japanese candlestick chart of PEP, below, I can see that the shares have been in an uptrend for at least the past three years. Impressive. PEP trades above the rising 40-week moving average line.
The weekly OBV line shows new strength from early March. The MACD oscillator is above the zero line but correcting. Lower shadows on the candles in June suggest the path of least resistance is up.
In this daily Point and Figure chart of PEP, below, I can see a potential upside price target in the $247 area.
In this second Point and Figure chart of PEP, below, I used weekly price data, which suggest a price objective in the $250 area.
Bottom-line strategy: PEP is trading higher early Thursday. Traders looking to go long PEP should buy a partial position on the opening in case prices continue to move higher. Sometimes prices dip 90 minutes into the trading day and that dip, if it happens, could be used for buying. Risk to $183. The $250 area is my price target.
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