PepsiCo Inc. (NASDAQ: PEP) traded slightly higher on Tuesday, after hitting support at 165.20 on Monday. However, it remained below the key barrier of 171.00, the break of which on Monday signaled the completion of a double top formation on the 4-hour chart. In our view, as long as the stock stays below tat barrier, the outlook remains bearish.
Even if the rebound continues for a while more, we see the case for the price hitting 171.00 and coming back under selling interest. This could result in another test at 165.20, the break of which would confirm a forthcoming lower low and pave the way towards the low of March 23rd, at 162.52. If there are no buyers to be found there, a break lower could aim for the 160.30 area, marked by the low of February 24th, the break of which could carry extensions towards the low of March 14th, at 155.80.
Shifting attention to our short-term oscillators, we see that the RSI lies below 50 but has just rebounded from its 30 line, while the MACD remains below both its zero and trigger lines. Both indicators detect negative momentum, but the fact that the RSI rebounded from near 30 adds credence to the view of some further recovery before the next leg south.
On the upside, we would like to see a clear break back above the record area of 177.55 before we start examining the bullish case again. This will confirm a forthcoming higher high and with the stock into uncharted territory, we will consider the next area of resistance to be the round figure of 180.00. In case market participants are not willing to stop there, a break higher may pave the way toward the next psychological number, at around 185.00.
Disclaimer:
The content we produce does not constitute investment advice or investment recommendation (should not be considered as such) and does not in any way constitute an invitation to acquire any financial instrument or product. The Group of Companies of JFD, its affiliates, agents, directors, officers or employees are not liable for any damages that may be caused by individual comments or statements by JFD analysts and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his investment decisions. Accordingly, you should seek, if you consider appropriate, relevant independent professional advice on the investment considered. The analyses and comments presented do not include any consideration of your personal investment objectives, financial circumstances or needs. The content has not been prepared in accordance with the legal requirements for financial analyses and must therefore be viewed by the reader as marketing information. JFD prohibits the duplication or publication without explicit approval.
There are risks involved with trading of cash equities. Past performance is not indicative of future results. You should consider whether you can tolerate such losses before trading. Please read the full Risk Disclosure.
Copyright 2022 JFD Group Ltd.