I. PEP
Last July 2012, I wrote this post in looking at Pepsico as a long-term investment idea. The stock was trading at $70.10, and looked ripe to break up and out of its monthly chart symmetrical triangle consolidation.
Updating that monthly chart, first below, we can see that Pepsi broke out, then retested its breached resistance trendline before rocketing into the upper-$80’s. The stock has since seen a mild dip back into the mid-$80’s. As you can see, price punched up through its upper monthly Bollinger Band. As a result, I would not be inclined to add or initiate to the long-term position here–The risk/reward is not that good here.
Going forward, I am looking for $80 to now act as a floor for the stock on any pullback. Note today that Coca-Cola is having an ugly day and possibly breaking down from consolidation. So, in sum, I still like Pepsi as a long-term idea but would be inclined to merely hold here (or trade around a core long-term position to lock in gains from ~ $70).
II. TGT
The next update is my Target long-term idea, which I first wrote about in February 2012 in this post. The stock was trading at $55.18 back then, and was also working through a symmetrical triangle on the monthly chart.
Updating that monthly chart, second below, the stock has since seen a strong breakout into the $70’s.
However, in a similar vein as Pepsi, price is now showing some signs of fatigue, and I would be inclined to hold or trade around a core position instead of buying more or initiating.
Target is also still intact on a long-term basis as an investment idea. But I would not want to see $65 lost with conviction on a pullback.
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