PepsiCo Inc. - (PEP) - October 6, 2023
Shares of food and beverage producer PepsiCo (PEP) continue to drift downward heading into Tuesday’s earnings report. PEP exited the green zone of the SIA S&P 100 Index Report at the beginning of July and since then, the shares are down 12.5%. Yesterday, PEP dropped into the Red Unfavored Zone for the first time since March after falling another 6 spots to 56th place.
Bearish technical signals keep piling up in PepsiCo (PEP) shares indicating that a three-year uptrend is ending, and a new downtrend has started. Since peaking back in May, a new downtrend of lower highs has emerged, two uptrend support lines have been snapped, and most recently, a Death Cross of the 50-day moving average falling below the 200-day average has been completed.
Next potential downside support appears near the $150.00 round number, followed by previous lows in the $140.00-$142.00 zone. Initial rebound resistance appears near $170.00.
Although PepsiCo (PEP) has been in a long-term uptrend for over a decade, from time to time it has staged significant corrections, most notably back in 2020. Another correction now appears to be underway. Since peaking back in May, the shares have drifted down from near $190.00 back toward $160.00 without even a 3-box reversal, a sign of consistent distribution. This week, PEP staged a bearish Double Bottom breakdown, confirming the start of a new downswing.
Previous column lows suggest potential support in the $146.00 to $149.00 zone, just below the $150.00 round number, followed on trend by $134.95 which is based on a horizontal count. Initial resistance appears near $174.55 based on a 3-box reversal.
With a bearish SMAX score of 5, PEP is exhibiting weakness against the asset classes.
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