Trade of the Day: Coca-Cola Co. (KO)

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We’ve opened a bullish trade on Coca-Cola Company (KO). KO stock is breaking up to new 52-week highs as traders continue to have some positive exposure to the stock market without taking on the additional risks that come with small-cap stocks. KO stock is a mega-cap issue with an incredibly stable balance sheet, a 3% dividend yield (thanks to the 6.1% dividend increase the company announced on Feb. 18) and a defensive product line — wherever you are, whatever your economic situation, there’s always enough money for an ice-cold Coke.

KO stock is still enjoying the fruits of its better-than-expected earnings report on Feb. 9. The company beat both revenue and earnings estimates, by $90 million and $0.01 per share, respectively, while announcing that global sales were up by 3%. This growth has been accompanied by solid margins thanks to low commodity prices and strong pricing power for its products.

‘Buy to open’ the KO April 45 Calls (KO160415C00045000) for a maximum price of $0.38.

Today’s broader market pullback means you may get a better price than that, though KO stock is holding up well compared to other assets. Looking at the solid up-trending resistance level that has been interacting with KO stock since April 2015, we anticipate the stock is going to continue rising toward $45, which will bring our $45 strike price into the at-the-money position.

You can learn more about identifying price patterns and using them to project how far you think a stock is going to move in our Advanced Technical Analysis Program.

InvestorPlace advisers John Jagerson and S. Wade Hansen, both Chartered Market Technician (CMT) designees, are co-founders of LearningMarkets.com, as well as the co-editors of SlingShot Trader, a trading service designed to help you make options profits by trading the news. Get in on the next SlingShot Trader trade and get 1 free month today by clicking here.

 


Article printed from InvestorPlace Media, https://investorplace.com/2016/02/ko-stock/.

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