Chart of the Day: Pepsi Pulls Back Before a Big Earnings Report
The stock has been under immense pressure, which may continue if the economy slows further. Earnings are set for Thursday morning.
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A sharp pullback for PepsiCo PEP over the last couple months has this giant snack food operator in a tough position. The stock has sold off sharply and is testing last month's lows, which also equate to those March lows. At that time, Pepsi made an epic run from the low $160s and peaked about the $180 level. But since then heavy distribution has hit Pepsi, as if someone "knows" their earnings this week will be poor.
Regardless, we still believe the company is dominating its markets and regions, and while their ability to raise prices in the future may be challenging, the price increases over the last couple years have stuck and will eventually make the company even more profitable.
Back to the chart, momentum is starting to rise again with Moving Average Convergence Divergence (MACD) nearly on a buy signal and stochastics turning up.
It is going to take a catalyst like an earnings beat to get this stock moving. Candles are purple, which reflects a bearish condition on the GoNoGo indicators.
For those willing to be patient, this looks to be a nice low-risk entry into adding more Pepsi shares. We rate PEP a Two in TheStreet Pro portfolio.
More Pro Portfolio:
- Locking in Big Gains on This High-Flying Stock
- Weekly Roundup: Reasons to Be Cautious
- Reading the 'News Signals' From Our Investing Notebook
At the time of publictaion, TheStreet Pro Portfolio was long PEP.
