PepsiCo Inc. (NASDAQ: PEP) traded lower on Friday, after it hit resistance at 166.70. Although Thursday’s low is higher than the prior one, formed on May 20th, the stock has been printing lower highs since April 28th, and thus, we would see decent chances for further declines.
The bears could initially target the 162.52 zone, near Thursday’s low, the break of which could aim for the low of May 20th, at around 159.65. If that barrier is not able to halt the slide either, then its break could see scope for larger declines, perhaps towards the lows of March 10th and 11th, at around 153.70.
Looking at our short-term oscillators, we see that the RSI hit resistance near 50 and turned down, while the MACD remains below both its zero and trigger lines. Both indicators detect negative speed and support the notion for further declines in this stock.
In order to abandon the bearish case, we would like to see a clear break above 171.90. This will confirm a forthcoming higher high on the daily chart and may initially aim for the high of May 16th, at 176.30, or the record high of 177.55, hit on April 28th. If investors are not willing to stop there this time around and decide to enter uncharted territory, then the next zone to consider as a possible resistance may be the round number of 180.00.
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