Coke Or Pepsi?
Duke Heberlein is
on vacation. Michael Brooks wrote this column.Â
Yesterday we looked at Coke, so it is only fair that we give Pepsi a day in
the spotlight. It’s always a good idea to look at other stocks in the
sector to get a feel for the group strength. When you see many stocks in a
sector forming a particular pattern or exhibiting strength, it can be an
indication that institutions are coming in to buy the group for their
portfolios. It’s another factor (and a very important one) that helps stack the
odds in your favor.
On Thursday we saw Coca-Cola
Enterprises
(
CCE |
Quote |
Chart |
News |
PowerRating) come across the “TradersWire”
as the stock touched the 20-day MA. Today we see Pepsi
Bottling Group
(
PBG |
Quote |
Chart |
News |
PowerRating) displaying a
similar reaction, as it pulls back to the 20-day MA. The post came across the
“TradersWire” as follows:
11:24:12
Pepsi Bottling Group
(
PBG |
Quote |
Chart |
News |
PowerRating) is
pulling back from its high and retesting the 20-day
moving average. PBG has a TradingMarkets.com
RS3 rating of 91 and an up trending ADX
of 37. Pepsi Bottling Group is trading at 32.42, up .23.
Looking at the above chart, we have clearly stacked the odds in our favor for
a long trade. We have a strong sector with the key stocks within the sector
exhibiting similar reactions at the 20-day MA (Indicating possible institutional
support for the group). Notice the Volume, very strong on the last up move and
very light on the pullback (another good sign). Finally, PBG has moved higher
the last two times it came near the 20-day MA.
Does this guarantee us a winning trade?
No, there is no crystal ball.
However, with proper money management and the discipline to only take trades
with multiple factors stacked in your favor, you will start to find your
end-of-month P&L statements consistently in the plus column.
Until next week.