Will PEPSICO INC breakout?

Our stock screener has spotted PEPSICO INC (NASDAQ:PEP) as a possible breakout candidate. A technical breakout setup pattern occurs when the stock is consolidating after a nice uptrend. Whether the actual breakout occurs remains to be seen of course, but it may be interesting to keep an eye on NASDAQ:PEP.

What is the technical picture of NASDAQ:PEP telling us.

Every day ChartMill assigns a Technical Rating to every stock. The score ranges from 0 to 10 and is determined by evaluating multiple technical indicators and properties.

Overall PEP gets a technical rating of 10 out of 10. This is due to a consistent performance in both the short and longer term time frames. Also compared to the overall market, PEP is showing a nice and steady performance.

• Both the short term and long term trends are positive. This is a very positive sign.
• When comparing the yearly performance of all stocks, we notice that PEP is one of the better performing stocks in the market, outperforming 90% of all stocks. We also observe that the gains produced by PEP over the past year are nicely spread over this period.
• PEP is one of the better performing stocks in the Beverages industry, it outperforms 90% of 41 stocks in the same industry.
• PEP is currently trading in the upper part of its 52 week range. This is a good signal, certainly because the S&P500 Index is currently trading in the lower part of its 52 week range.
• PEP is currently showing a bull flag pattern! A bull flag pattern occurs when prices pull back slightly after a strong rise up. This may be a nice opportunity for an entry.

How do we evaluate the setup for NASDAQ:PEP?

Besides the Technical Rating, ChartMill also assign a Setup Rating to every stock. This setup score also ranges from 0 to 10 and determines to which extend the stock is consolidating. This is achieved by evaluating multiple short term technical indicators. NASDAQ:PEP currently has a 8 as setup rating:

Besides having an excellent technical rating, PEP also presents a decent setup pattern. We see reduced volatility while prices have been consolidating in the most recent period. A pullback is taking place, which may present a nice opportunity for an entry. There is a resistance zone just above the current price starting at 182.24. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 180.4, a Stop Loss order could be placed below this zone.

Trading breakout setups.

A breakout could materialize when the stock breaks out to new highs above the current consolidation zone. One could wait for this to happen and buy when this happens. A stop loss could be placed below the consolidation zone.

This article should in no way be interpreted as trading advice. You should always make your own analysis and trade or not trade based on your own observations and style. The article is based purely on some technical observations.

Our Breakout analyzer lists more breakout setups and is updated daily.