After a strong win streak, we do have positions that are down. Consider holding them all at this point. Oil is oversold. Gaming stocks are overbought. And our drug stocks are over-extended. Hold them all.
The markets are a bit wild, too. After falling about 400 points this week, the Dow bounced back 225 points, intra-day Thursday. By the end of the day, the Dow was up 63. It’s pandemonium. Money is flowing out of the market. Yet, the market is moving up. That makes no sense.
As for Coca Cola (KO), Money Flow (MFI) just fell under its 20 line. It’s now oversold on that indicator after the stock failed at a double top. RSI is about to cross under its 30-line, and MACD is over-extended to the downside.
At the same time, KO has been… well KO’d at the lower Bollinger Band with a massive over-extension to -100 on Williams % Range. We also have a spike from the mean on DMI, which should correct.
It’s also a Warren Buffett stock.
These indicators tell me KO should bounce back. Consider buying to open the KO May 2015 41 call up to $2.60.
Let’s get back into making good money, shall we?
Ian L. Cooper
Forgotten Profits