NEW YORK (TheStreet) - The maker of soda pop and chips & dip PepsiCo(PEP) - Get Report has had a strong upward trend since February 2014, but since setting an all-time intraday high in February 2015 has formed a trading range around its 50-day and 200-day simple moving averages.
The reaction to earnings scheduled for release before the opening bell on Thursday will have weekly chart either positive or neutral, in a pop or dip action shown in today's must see charts.
Analysts expect Pepsi to earn $1.23 a share. Some analysts say that the company will continue to feel the headwinds of the stronger dollar. Others are upbeat, like Barclay's, which reiterated an overweight rate and a $111 price target. Jefferies also reiterated a buy rating. And, Susquehanna reiterated a positive rating but with a lower price target to $116 from $123.
Here's the daily chart for Pepsi.
Pepsi had a close of $96.40 on Tuesday up just 1.9% year to date and is down 4.3% from its all-time intraday high of $100.76 set on Feb. 11. The stock has been above its 200-day simple moving average since March 25, 2014 when this average was $82.08 until March 18, 2015, when it rose to $93.93.
Today, the stock is above its 50-day and 200-day simple moving averages of $95.32 and $95.92, respectively. Pepsi is in a trading range between the March 18 low of $92.24 and the Feb. 11 high of $100.76.
Here's the weekly chart for Pepsi.
Courtesy of MetaStock Xenith
The weekly chart for Pepsi will shift to positive if the stock ends the week on Friday above the key weekly moving average of $95.34. Otherwise the weekly chart will be neutral. The weekly momentum reading is projected to rise to 40.60 this week up, from 37.32 on July 2. The stock has been above its 200-week simple moving average since the week of Nov. 25, 2011 when this average was $62.75. This reversion to the mean is now at $80.23.
Investors looking to buy Pepsi should place a good till canceled limit order to buy the stock if it drops to $94.18, which is a key level on technical charts until the end of 2015.
Investors looking to reduce holdings should place a good until canceled limit order to sell stock if it rises to $97.1, which is a key level on technical charts until the end of July.
Investors not familiar with technical analysis should begin with the notion that a price chart for a stock shows a road map of past price performance, which provides guidance for predicting future share price direction.
Here's how to read a daily chart. There are two moving averages to follow; the 50-day simple moving average is in blue while the 200-day simple moving average is in green.
Here's how to read a weekly chart. The red line tracks the ups and downs of the key weekly moving average. The green line is the 200-week simple moving average. The red line that oscillates along the bottom of the chart is the momentum reading on a scale of 00.00 to 100.00. A reading below 20.00 is oversold and a reading above 80.00 is overbought.
A technically positive weekly chart occurs when a stock ends a week above its key weekly moving average with the momentum reading rising above 20.00.
A technically negative weekly chart occurs when a stock ends a week below its key weekly moving average with the momentum reading declining below 80.00.
This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.