Stock of the day: Coca-Cola
23 August 2024
Coca-Cola is showing signs of potential trouble, despite reaching new long-term highs on Wednesday. This could actually mark the beginning of a bearish reversal. The reason for this cautionary outlook is the formation of a double top pattern on the chart. The first top was formed on August 2nd, and the second top occurred on August 21st. The price is now heading towards the neckline of this pattern, which is marked with blue lines.
If the price breaks below the neckline, it would trigger a strong sell signal. This double top is further validated by a divergence in the MACD indicator, adding more weight to the bearish scenario. A daily close below the blue neckline would confirm the sell signal, with the potential target being the black uptrend line or the orange horizontal support level.
Overall, this setup presents a compelling short trade opportunity with a favorable risk-to-reward ratio. It will be crucial to monitor where the market closes to see if this bearish scenario unfolds.