Coincidentally, one of Warren Buffett's favorite stocks is looking strong from a technical standpoint too this week. Coca Cola (KO - Get Report) has been in a long-term uptrend since the end of 2011, rallying close to 18% since the end of November. That's some big performance for a staid $175 billion name like Coke.
The uptrend in Coke is significant because it has taken place within a clearly defined trend channel. That channel gives traders high probability expectations for the moves that Coke makes -- and it's providing us with a trade right now. In a trend channel, the ideal time to buy is when shares bounce off of trendline support -- almost exactly where Coke's sitting right now. The fact that KO has bounced higher off of support the last seven times it fell to that level bodes well for bounce number eight.
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