And here we have another stock where support and resistance levels coupled with the volume point of control are likely to play an important role and this time it is Coca-Cola (ticker KO), and perhaps one to add to the watchlist.
Following November’s gap up, the stock has been oscillating around the volume point of control on the weekly chart which is what we would expect to see. In other words, a period of congestion building around the VPOC itself, the yellow dashed line, that is anchored in the $53.20 per share area on this timeframe. However, there are two key levels, one above and one below. The price resistance ahead is clearly defined with the blue dashed line of the accumulation and distribution indicator and as we can see is significant for two reasons. First, if it is breached opens the way for a clear run towards $60 per share as the volume on the VPOC histogram falls away rapidly and in addition, there is nothing in the way of price-based resistance. Second, below the current price action, there is an extremely strong level of support in place at $51.70 with a cluster of two levels acting together and thereby offering an excellent springboard for the anticipated move higher.
In summary, a good prospect for a watchlist and one where patience is the order of the day.
Charts from NinjaTrader and indicators from Quantum Trading
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