The world´s largest beverage company seems to stay on a very quiet, even lethargic, movement. Its outlook appears to be weaker if we compare it with the Dow Jones´ behaviour, which this stock belong to, because, as the most popular Index of the New York Stock Exchange has been able to overtake its 2010 high level, which was touched by the 20th of January, Coca-Cola has remained very far from its analogous zone.
The main reason for this seemingly lack of dynamism should be found out on the robustness of the 56-dollar resistance, which has concentrated too much selling interest. This level has eventually become an impregnable fortress for the bullish side. Therefore, it will need a consistent effort to be hit.
However, despite the short-run scenario difficulties, this security remains upwards from a long-term perspective. The key technical element continues to be its 200-session moving average, which is a very reliable statistical element for the current analysis. In fact, since this lagging indicator was overtaken by the prices by the end of May 2009, the most logical strategy has been to keep long positions. Even the first quarter of 2010 correction was unable to invalidate the hypothesis that a new upward cycle had begun.
To sum up, Coca-Cola shows a favourable outlook for a long position strategy, despite its short-term sideways situation.
The recommendation is to hold. Stop loss if it breaks the level of 52.40 dollars.
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