The Importance of Looking at Longer Term Charts

While many many traders are focused on the here and the now (short term), the importance of looking at longer term charts is very crucial, especially if you are a longer-term swing/position trader or investor. While something may look bearish for example on the Daily chart, the weekly,monthly or even the quarterly chart(s) might not look so bad. To put this dilemma in context, I will be comparing the chart of America’s two favorite Cola’s, Coke and Pepsi.

The Charts

Daily

Below are the Daily charts for Coca-Cola Co. & Pepsico Inc. As you can see, one is in a clear downtrend (Pepsi) while the other (Coke) is in a clear uptrend. One is fresh off 52 week lows while the other is fresh off 52 week highs. One is above all Major long term moving averages, while the other is below. I think you get my point here, Pepsi’s chart is bearish while Coca-Cola’s chart is bullish.

$KO - The Coca-Cola Company 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$PEP- PepsiCo, Inc. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarterly

Now lets take a look at the quarterly charts (Yes! Each candle is 1 quarter!). As you will see, it will tell a whole different story. If you are going to measure strength by seeing how far the stock is from its all-time high, than you will be faced with a hard decision here. Coca-Cola is 24.9% away from its All-Time High while Pepsi is 28.5%. HOWEVER, here is the big difference. Coca-Cola hit its all-time high in 1998 and had not really shown bullish signs until lately (last 2 years). Pepsi on the other hand has been in a nice and steady uptrend in the same time period. However, it will be important to see if this does not turn into a lower high.

$KO - The Coca-Cola Company 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$PEP- PepsiCo, Inc. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Conclusion

So in conclusion, which stock  is better? Really, I cannot tell. Both have their bearish and bullish signs. If I HAD to pick, I would go with Coca-Cola just because it is not only closer to its all-time high, but also it is near its 52week high as the market shows weakness (plus I like the taste of Coke better, even though I do not drink Soda often).

Tags: $PEP, $KO, $PBG, $CCE, $COKE

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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