Coca-Cola Co. (KO) is the Stock of the Day at Real Money after the beverage giant released third-quarter earnings that were in line with expectations and revenue that beat expectations. The stock was up about 2% in pre-market activity here on Friday. Let's check out the charts of KO.
In this daily bar chart of KO, below, we can see that the price of KO bottomed out a little later than the broad market did last December as it finally reversed direction in February and March. Prices made a good advance into early September before correcting the past few weeks. KO is below the rising 50-day moving average line, but that could change here on Friday. The 200-day moving average line is well below the market and rising.
The daily On-Balance-Volume (OBV) has been moving sideways the past year and has not really confirmed the price gains. The line is not far from a new high, however, so I am optimistic we will see the OBV line confirm the price movement. The Moving Average Convergence Divergence (MACD) oscillator is slightly below the zero line but poised to turn upwards for a cover shorts buy signal and probably an outright buy signal in the days ahead.
In this weekly bar chart of KO, below, we can see a bullish picture. Prices are above the rising 40-week moving average line. The weekly OBV line is strong and at a new high with price, unlike the movement of the daily OBV line. The MACD oscillator is well above the zero line but just crossed to a take profits sell signal. A reversal back to the upside for the MACD oscillator should not be too hard.
In this Point and Figure chart of KO, below, we can see the uptrend and a potential upside price target of $69.
Bottom line strategy: These three charts of KO, above, tell a bullish story. Traders should hold existing longs and those who are flat could go long KO at current levels, risking below $52. The $70 area is our price target.
