Technical Update - Pepsico likely to resume uptrend after weeks of selling pressure
Kim Cramer Larsson
Technical Analyst, Saxo Bank
Pepsico strong earnings yesterday gave a boost to the share price that jumped to approx. the 50% of the downtrend since August. Pepsico share price jumped bullish out of the falling wedge like pattern formed over the past couple of months.
If Pepsico can continue the bounce and close above $174.55 it has reversed the downtrend and confirmed new uptrend. An uptrend that can take Pepsico to August peak at around $181, potentially higher maintaining its uptrend (higher highs and higher lows) as can be seen on the wseekly chart.
RSI still showing negative sentiment but if the share price trades higher next few days RSI is likely to close above 60 threshold i.e., a change to positive sentiment.
If Pepsico lose momentum and closes below the upper trendline in the falling wedge it would be an indication of the potential uptrend is to be cancelled. If that plays out last week’s low at 160.98 and the medium-term rising trend line (see weekly chart) are likely to be tested. A close below both levels Pepsico is likely to drop to around 155.
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