PepsiCo Reports Earnings Monday - Here’s How the Chart Looks

PepsiCo will report earnings on Monday. The charts point to a tightening range that will hopefully be resolved by the quarterly results.
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PepsiCo  (PEP) - Get Report has spent much of the last three months trading in a sideways range. However, that may change on Monday after the company reports earnings.

As of this writing, Pepsi stock was down just 23 basis points over the last three months.

That lags both the Dow Jones Industrial Average and the S&P 500, which are up 9% and 13.5% during that time, respectively.

Interestingly though, PepsiCo is handily outperforming Coca-Cola  (KO) - Get Report, which is down almost 9% over the last three months.

PepsiCo suffered a peak-to-trough decline of 30.6% amid the coronavirus selloff. After going nowhere for awhile, bulls will be looking to see if the stock can finally make an upside move and challenge its prior highs.

We won’t have to wait too long to find out, with Pepsi reporting its second-quarter earnings before the open on Monday. Let’s look at the charts ahead of the event.

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Trading PepsiCo Stock

Daily chart of PepsiCo stock.

Daily chart of PepsiCo stock.

The sharp fall and sharp rebound has left shares trading in a relatively tight range, between $128 and $135. The trend is ever-so-slightly favoring the downside, with downtrend channels forming around the recent range (blue lines).

Also notice how PepsiCo stock keeps congregating around its major moving averages, which includes the 20-day, 50-day and 200-day moving averages all within about a $1 range.

From a bullish perspective, I would love to see Pepsi clear the $137.50 mark and close above it.

That’s only about 3% above current levels, but it would propel the shares over all of its major moving averages and channel resistance, as well as range resistance between $135 and $137.50, a zone that has been relevant for almost a year now.

If it can do that, then it puts the highs in play at $145.

On the downside, look to see if shares break below $131.50. That will put it below its major moving averages, and put channel support in play near $125 to $126.

Below that and the 50% retracement may be in play at $122.86.