Monster Beverage Dropped. Is a Rebound Next?
Monster Beverage rallied steadily between March and July. It then fell sharply, which may create opportunities for dip buyers.
The first pattern on today’s chart is the pullback to the 200-day simply moving average (SMA) on August 9. Notice how buyers defended the level, creating a potentially bullish hammer candlestick.
This could be noteworthy because it was MNST’s first test of the 200-day SMA since the energy-drink company fought through the line in May and June.
Next, the 50-day SMA rose above the 200-day SMA on June 23. That kind of “golden cross” pattern may suggest the longer-term uptrend is resuming.
The recent dip also pulled stochastics into oversold territory. Additionally notice the series of lower highs since the drop on August 5, resulting in a falling trendline. Will a close above that resistance attract would-be buyers?
Finally, consider that MNST dropped this month because earnings missed estimates. (Revenue beat consensus, a sign of demand remaining intact.) Higher costs -- especially for energy and transportation -- were the main culprit. Given recent signs of inflation easing, longer-term investors may look for those margin pressures to ease.
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This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: https://www.tradestation.com/important-information.
The first pattern on today’s chart is the pullback to the 200-day simply moving average (SMA) on August 9. Notice how buyers defended the level, creating a potentially bullish hammer candlestick.
This could be noteworthy because it was MNST’s first test of the 200-day SMA since the energy-drink company fought through the line in May and June.
Next, the 50-day SMA rose above the 200-day SMA on June 23. That kind of “golden cross” pattern may suggest the longer-term uptrend is resuming.
The recent dip also pulled stochastics into oversold territory. Additionally notice the series of lower highs since the drop on August 5, resulting in a falling trendline. Will a close above that resistance attract would-be buyers?
Finally, consider that MNST dropped this month because earnings missed estimates. (Revenue beat consensus, a sign of demand remaining intact.) Higher costs -- especially for energy and transportation -- were the main culprit. Given recent signs of inflation easing, longer-term investors may look for those margin pressures to ease.
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
Important Information
TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. You Can Trade, Inc. is also a wholly owned subsidiary of TradeStation Group, Inc., operating under its own brand and trademarks. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a Member of NFA. When applying for, or purchasing, accounts, subscriptions, products, and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means.
This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: https://www.tradestation.com/important-information.
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