Since its record high of $41.31 on August 18, Keurig Dr Pepper (KDP) shares have been cooling off. Falling below the $37.50 level before staging a brief bounce towards the 20-day moving average. Although this trendline rejected the rally attempt, the security again found some padding at the aforementioned $37.50 mark. An additional layer of support may also emerge, in the form of a historically bullish trend that is currently flashing on the charts.
According to a study by Rocky White, Senior Quantitative Analyst at Schaefer, the KDP came within one standard deviation of its 160-day moving average after a long-term journey above here. The beverage stock has seen five similar signs over the past three years, enjoying positive one-month returns on 80% of these signals, and an average 4.4% pop during that time period. From its current perch at the $37.50 mark, a similar move would put the equity at $39.15, clearing the recent hurdle of the 20-day moving average.
The security remains a relative outperformer to the broader market, with small year-over-year gains and 5.7% year-over-year gains. This could invite a round of analyst upgrades, especially considering the five out of 10 in coverage calls KDP calls a “hold.”
Alleviating pessimism among options traders could also have contributed to some tailwinds for the stock. On the International Securities Exchange (ISE), the Cboe Options Exchange (CBOE), and the NASDAQ OMX PHLX (PHLX), the KDP has a 10-day put/call volume ratio of 2.28, higher than all but 1% of the reading. last 12 months. In other words, puts have rarely been more popular among these traders during this period.
On a final note, the 14-day relative strength index (RSI) of Keurig Dr Pepper stock sits at 34, which sits at the peak of “oversold” territory. This could be a sign of a short-term boom for the name of the drink.
Credit: www.forbes.com /