Long-Term Idea: PepsiCo, Inc.

My earlier long-term ideas in this blog have been the likes of Wal-Mart last October, Discover Financial Services last December, Target last February and, oh yeah, MasterCard in March 2011. While I am predominantly a momentum-driven technical swing trader holding for days or weeks, these long-term ideas have performed magnificently. Now, go ahead and put that real-time, timestamped analysis up against any of your gurus of choice on television or in the Hamptons houses. Yeah, that’s what I thought.

Setting the bar high means you can either shy away from the pressure or embrace it. I believe that I have built a widespread and loyal reader base in recent years despite being out of the loop of the cool kids in the finance world because I don’t much care about seeking anyone’s approval. I call the market and the psychology of trading and gambling exactly as I see it, letting everyone else jockey for popularity contests and rubbing elbows at summer houses. It’s easy to talk to a big game about being a leader and innovator, but most people cannot even lead themselves. Think about that the next time you see some wannabe alpha pup post a few blogs talking a big game, only to flake out within a few months, if that.

Turning back to the long-term ideas, take a look at the Pepsico, Inc. monthly chart below. We see another massive symmetrical triangle that we observed on DFS and MA before their respective major breakouts. However, as Edwards and Magee wrote, triangles are the most typical type of chart pattern that often morphs into a larger pattern. Thus, I want to see PEP at least clear $72.50 to get me really thinking major breakout. Nevertheless, with their strong brands and global growth prospects, the time may very well have come for Pepsi to make its next move within its secular uptrend, up above its early-2008, all-time highs.

Note that earnings are scheduled for 07/25.

__________________________________