The Coca-Cola Co. stock (NYSE: KO) traded in a consolidative manner yesterday, staying marginally above the upside support line drawn from the low of January 29th. As long as the stock stays above that line, we would consider the outlook to still be positive, but before we get confident on another round of buying, we would like to see a strong break above last Wednesday’s and Thursday’s lows, at around 54.65.
A recovery above 54.65 could signal that the prevailing uptrend is still in force, and may encourage investors to aim for the peak of last Tuesday, at around 55.77. If they don’t stop there, we may see them targeting the 56.50 barrier, defined as a resistance by the high of June 4th. Another break, above 56.50, would place the stock into territories last tested in March 2020, with the next potential resistance zone being at 58.25, marked by the high of the 5th of that month.
Shifting attention to our short-term oscillators, we see that the RSI rebounded from its 30 line, while the MACD, although below both its zero and trigger lines, shows signs of bottoming as well. Both indicators detect slowing downside speed, and support the notion that the latest retreat may have come to an end. That said, we stick to our guns that a rebound above 54.65 is needed for signaling the resumption of the prevailing uptrend.
On the downside, we would like to see a clear dip below 53.80, before we abandon the bullish case. Such a move would also take the share price below the aforementioned upside line and may open the gate for declines towards the 52.50 zone, which provided support on March 31st, April 1st and April 5th. It is also marked by the inside swing high of March 8th. If participants allow the stock to move even lower, then the next territory to consider as a support may be at around 51.20, marked by the lows of March 24th and 25th.
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