Instead of gambling in travel and leisure stocks, Jim Cramer urged viewers of Mad Money Thursday night to put their money in the stocks that are working, stocks like those in his Covid-19 index. He said PepsiCo Inc. (PEP) yields 3%, has a strong balance sheet and a strong secular trend.
Let's check out the charts of Action Alerts PLUS holding PEP to see what trends we have.
In the daily bar chart of PEP, below, we can see that prices declined sharply in February and March but rebounded back to resistance in the $135-$140 area. Prices have been making slightly lower, lower highs since the middle of April and then broke to a new low for the move down Thursday. The 50-day moving average line is still positive while the 200-day moving average line has been flat.
The On-Balance-Volume (OBV) line rose from the middle of March to the middle of May and has since weakened. The Moving Average Convergence Divergence (MACD) oscillator has hugged the zero line recently telling us that there is not much in the way of "trend strength."