Chart of the Day: This Portfolio Stock Could Use a Jolt
The shares are likely rangebound for the foreseeable future.
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A little sideways action is often constructive and needed after a big surge higher. But with PepsiCo PEP the time is getting extended. Basically, after a tight base is created we like to see a stock make a move towards the top of the range and then exceed those levels on good turnover. Well, that is the preferred scenario. It doesn't always happen that way.
The price action in Pepsi is narrowing towards an apex, so we do believe a breakout is imminent, we just don't know which direction yet. The chart below shows lower highs but higher lows, which is the definition of NO TREND. Money flow is improving, however, along with MACD (moving average convergence dibvergence), which remains on a buy signal.
Other indicators, such as the chop index and stochastics (momentum), are not showing bullishness yet, but could certainly flip if the stock moves above the downtrend line marked in the top pane.
We like Pepsi and rate it a Two in TheStreet Pro Portfolio.
At the time of publication, TheStreet Pro Portfolio was long PEP.
