Stock of the day: Coca-Cola
13 September 2024
Let's examine the technical setup on Coca-Cola. The stock is currently undergoing a correction phase, forming a wedge pattern that is getting progressively narrower, indicating that a breakout is likely imminent. This wedge is outlined by the black lines, representing the consolidation of price movements. Notably, this wedge is forming below a key mid-term uptrend line, which adds a slightly bearish undertone to the pattern. However, wedge formations are generally viewed as bullish, with a high probability of breaking to the upside.
How to approach trading this? If the price manages to break above the upper line of the wedge and crosses the blue uptrend line, it would generate a strong buy signal. Conversely, if the price bounces off the upper wedge line and the uptrend line, then breaks below the lower line of the wedge, that would indicate a bearish scenario and a signal to sell. This pattern warrants close monitoring, as the breakout direction will be key.