Chart of the Day – $KO KO’ed

by Enis October 2, 2013 11:52 am • Commentary

Coca-Cola has quietly given back practically all of its gains from earlier this year.  The stock actually got off to a very strong start, making new all-time high after new all-time high from March until May.  By mid-May, the stock was up almost 20%, an amazing 5 month performance for a staid old soft drinks company.

Ever since that blazing start, KO has been on a steady trend lower.  The stock’s made a series of orderly lower highs and lower lows, and is now only up 3% in 2013:

KO Daily, Courtesy of Bloomberg
KO Daily, Courtesy of Bloomberg

This gradual march lower has actually brought KO quite close to its crucial long-term support level between 35 and 36.  That area served as resistance in 2011, and was important support in 2012:

KO Weekly, Courtesy of Bloomberg
KO Weekly, Courtesy of Bloomberg

The whole consumer staples sector has been weak, but KO has been especially weak in the past few months.  However, with the stock fast approaching long-term support, we’re sharpening our pencils to at least play for short-term consolidation, if not an outright bounce.