Since its record high of $41.31 on August 18, Keurig Dr Pepper (KDP) shares have begun to calm. The drop to the $37.50 level before starting a short bounce towards the 20-day moving average. While this trend line ended up rejecting a rally attempt, the safety found some padding at the $37.50 mark mentioned above once again. An additional layer of support may also emerge, in the form of a historically bullish trend line that just appeared on the charts.
According to a study by Rocky White, senior quantitative analyst at Schaeffer, the KDP just came within one standard deviation of its 160-day moving average after a long period of travel above here. Beverage stocks have seen five similar signals over the past three years, enjoying a one-month positive return on 80% of these signals, and an average rise of 4.4% over that time period. From its current position at the $37.50 mark, a similar move would put capital at $39.15, removing the last hurdle at the 20-day moving average.
The securities have remained relatively outperforming in the broader market, maintaining a small lead to date, and annual gains of 5.7%. This could call for a round of analyst upgrades, especially given five out of 10 coverage, calling KDP a “contract”.
The dissolution of pessimism among options traders could also contribute to some of the stock’s tailwinds. On the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), KDP has a 10-day sell/call volume ratio of 2.28, which is above all but 1% of the twelve month readings. past. In other words, sell offers were rarely more popular among these traders during this time period.
On a final note, Keurig Dr Pepper’s 14-day Relative Strength Index (RSI) is at 34, sitting on the cusp of “oversold” territory. This may be an indication of a short-term throwback to the name of the drink.