Anheuser-Busch, Molson Coors Shares Trending Down Before Earnings

NEW YORK (TheStreet) -- Investors should be wary of shares of brewers Anheuser-Busch InBev (BUD) and Molson Coors (TAP), both of which are trending down heading into earnings.

Anheuser-Busch, which is scheduled to report before the opening bell on Wednesday, set an all-time intraday high of $128.35 on Feb. 26, and has been falling since. Analysts expect the company to post earnings of $1.06 a share. On Monday, CLSA downgraded its rating on the stock to underperform from outperform on concerns about volume and the stronger U.S. dollar.

Molson Coors, which is scheduled to report before the opening bell on Tuesday, is expected to post earnings of 43 cents a share. Analysts are concerned about sliding sales volume in North America and Europe. The stock has slid since it hit an all-time high of $79.18 on April 9.

Let's look at the daily and weekly charts for Anheuser and Molson and provide the key technical levels at which to buy on weakness and the key technical levels at which to sell on strength. 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. This chart shows weekly price bars going back to the beginning of 2007 and thus includes the crash of 2008, and then the current bull market for stocks that began in March 2009. 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.

Here's the daily chart for Anheuser-Busch.


Courtesy of MetaStock Xenith

Anheuser-Busch, which closed at $118.23 on Monday, is up 5.3% year to date and 7.9% below its 2015 high.

The stock has been above its 200-day simple moving average since Jan. 8, when the average was $110.67. The stock is below its 50-day simple moving average of $123.64 and above its 200-day simple moving average of $115.42.

Here's the weekly chart for Anheuser-Busch.


Courtesy of MetaStock Xenith

The weekly chart is negative with the stock below its key weekly moving average of $122.01 and with the 200-week simple moving average of $91.66 as the longer-term uptrend and the reversion to the mean. The momentum reading for the stock is 50.15, which is down from 61.52 a week ago.

Investors who think that "This Bud's For You" should place a good-till-canceled limit order to purchase the stock if it drops to $105.84, which is a key level on technical charts until the end of 2015.

Investors looking to reduce holdings should place a good-till-canceled limit order to sell the stock if it rises to $124.19, which is a key level on technical charts until the end of May.

A key technical level of $118.93 should provide a magnet until the end of June.

Here's the daily chart for Molson Coors.


Courtesy of MetaStock Xenith

Molson closed at $73.65 on Monday, down 1.2% year to date and 7% below its 2015 high. The stock had been above its 200-day simple moving average from Feb. 7, 2014 until Feb. 10, when the average was $51.85. The stock is now below its 50-day and 200-day simple moving averages of $75.17 and $74.41, respectively.

Here's the weekly chart for Molson.


Courtesy of MetaStock Xenith

The weekly chart is negative, with the stock below its key weekly moving average of $75.01 and with the 200-week simple moving average of $53.93 as the longer-term uptrend and the reversion to the mean. The momentum reading for the stock is at 49.38 down from 55.97 last week.

Investors looking to buy the shares should place a good-till-canceled limit order to purchase the stock if it drops to $70.09, which is a key level on technical charts until the end of 2015.

Investors looking to reduce holdings should place a good-till-canceled limit order to sell the stock if it rises to $75.82, which is a key level on technical charts until the end of May.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.

More from Opinion

Throwback Thursday: Intel Edition

Throwback Thursday: Intel Edition

Intel's Next CEO Should Try Harder to Protect Its Flanks Against AMD and Others

Intel's Next CEO Should Try Harder to Protect Its Flanks Against AMD and Others

3 Warren Buffett Stock Picks That Could Be Perfect for Your Retirement Portfolio

3 Warren Buffett Stock Picks That Could Be Perfect for Your Retirement Portfolio

Wednesday Wrap-Up: GE and Facebook

Wednesday Wrap-Up: GE and Facebook

PayPal Strikes Again, Facebook, and AT&T -- 3 Tech Stories You Must Know

PayPal Strikes Again, Facebook, and AT&T -- 3 Tech Stories You Must Know