The Coca-Cola Co. stock (NYSE: KO) traded higher yesterday, but hit resistance once again at 53.70 and then, it pulled back. Since March 26th, most of the price action has been contained between the 52.50 support and the 53.70 resistance, but it continues to trade above the upside support line drawn from the low of January 29th. With that in mind, we will adopt a cautiously-positive stance.
Yesterday’s setback may continue for a while more, perhaps for the price to test the 52.50 barrier, or the aforementioned upside support line. Investors may decide to jump back into the action from near one of those territories and perhaps push it up for another test at 53.70. However, in order to start examining more advances, we would like to see a move above the high of March 29th, at 53.95. Such a move may pave the way towards the peak of December 31st, at 54.70.
Taking a look at our short-term oscillators, we see that the RSI stands above 50, but points down, while the MACD, although slightly positive, lies below its trigger line. Both indicators support our view that some further retreat may be looming before the next leg north.
Now, in order to abandon the bullish case, we would like to see a dip below 51.60. This may also take the stock below the pre-mentioned upside line and could initially target the 50.70 barrier, marked as a support by an intraday swing low formed on March 22nd. Another break, below 50.70, could extend the decline towards the 50.15 zone, marked by the lows of March 12th and 19th, the break of which could aim for the low of March 4th, at 49.60.
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