Earnings Play: PepsiCo

Bullish bias above Monday's opening gap.

Trader 3

On Thursday, before market, PepsiCo (PEP) is expected to release third quarter EPS of $1.49 compared to $1.56 last year on revenue of approximately $17.2 billion, in line with the year before. PepsiCo is an international beverage and food company, and its expected move based on front-month options is 2.7%. The last time the company reported earnings the stock rose 0.3%.

Technically speaking, on a daily chart, PepsiCo's stock price is currently holding above an opening gap from Monday, after price gapped up 1.9% from Friday's close. Looking back further it appears PepsiCo's stock price has been chopping around the 200-day simple moving average (SMA) in a consolidation range since April. The RSI shows upside momentum and is above its neutrality area of 50. As long as price can hold above the low from the opening gap day on Monday, which is 135.60, the bias should remain bullish. Price will likely retest its first resistance level of 141.00. If price can breakout to the upside of 141.00, traders should look for price to reach for 144.00. However, if price closes below the gap day low of 135.60, it would be a bearish signal that could cause price to fill the gap and fall back to 133.80. If price cannot find support and bounce off of 133.80, price could potentially continue its descent and hit 129.40.           

Source: GAIN Capital, TradingView

Build your confidence risk free

More from Earnings

Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.