I want to revisit the stock Coca Cola Femsa (KOF) since it was first profiled on June 5th on zentrader. It’s been on a bullish tear which is no small feat in this market, but I think the cracks are starting to show and it’s time for a corrective period to shake off some of the bullish traders. This will be a good thing for this stock going forward and give us all a 2nd chance to get in this stock. It’s obviously going to be a big winner when you consider recent strength and worthy to be on our long term watchlists.
My view is if we can close below friday’s lows on a daily view then that will start the selling by those who want to lock in profits and allow this to have a natural pullback. I would start to get interested in this stock around the $120-122 range and I reserve the right to change my projection based on how it pull’s back. I want to see light volume, contained selling, and an orderly decline. And it goes without saying no earnings disappointments.
We’re entering earnings season next week so keep your hats on. This is either going to be the catalyst for the markets to rally or sink.
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July 8th, 2012 at 1:14 pm
Nice chart and good idea. Definitely worth watching on the long side; Short side daytrade is possible if we have a selloff day.
Very nice writeup on what you would look for etc.
July 8th, 2012 at 1:35 pm
john,
I wouldn’t short this stock as it’s way too strong. I understand the theory of “if it’s going to go down, might as well profit from it” but it may not go down. It could have a sideways correction. If it does that I’ll raise my buy level and comment on the blog.
Thanks for being so regular with your comments. I don’t always have time to respond but I do appreciate feedback from you and all the others that comment on a regular basis.
July 8th, 2012 at 5:21 pm
Jeff – you are most welcome and I should be the one to thank you. Running a blog and with the passion and honesty that you bring to it is rare and most appreciated. If you ever doubt that you are making a positive impact, read this comment again. Its not an easy job but you do it well.
I sort of expected you to say ‘don’t short it’ since my own feeling was I am being cute. Thank you for the being the voice of reason. I really am grateful. You are right – a sideway correction could be nice to go long.
July 8th, 2012 at 6:28 pm
you’re very kind – and thanks.
another piece of advice. don’t short anything with less than 750k avg daily vol and make sure it’s above $10, preferably $20. You’ll just be in a better position to unload and avoid unnecessary volatility. it pays to put any edge on your side you can.
July 8th, 2012 at 8:29 pm
Excellent points; Its amazing sometimes how the ‘basics’ need to be hammered in again and again. So easy to get complacent and then we get the whupping. Thanks!
July 9th, 2012 at 12:11 pm
Nice action in it today -
July 10th, 2012 at 9:24 am
$KO: Coca-Cola shareowners approve two-for-one stock split (78.30 +0.32)
Co’s shareowners approved a two-for-one stock split and an increase from 5.6 billion to 11.2 billion in the number of authorized shares of the Company’s common stock.
The record date for the stock split is expected to be July 27, 2012, with new shares expected to be distributed on or about Aug. 10, 2012.