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Fan Yang

Pepsico Inc. (PEP) In a Mini Price Top; $123-$125 is a Buy Zone

Pepsico's $PEP bullish trend in 2019 is coming to an end, or at least taking a break.

PEP Daily Chart

(click to enlarge)

Price Top:
- On the daily chart, we can see that price has been bullish since late 2018 when it bounced off $105-$106, a previous support in October '18.
- However, price stalled under $135 and has been consolidating between roughly $131 and $135 for almost 2 months. 
- Price ended last week with a bearish break down of a rising trendline as well as the $131 support.
- It is still a premature price top, with the breakdown very subtle. 
- Furthermore, the daily RSI is still holding above 40, a sign that the bullish momentum is still linger.
- The thing is, during the 7/23 session, we saw price try to rally but retreated from $132. This is another subtle bearish sign.
- Maybe we will see a dip. 
- If it does, I would love to add exposure around $123-$125 (I have a small position in PEP). 
- I  have dry powder for the $125 area right now.
- The $122.50 area was a previous resistance and could turn into support in the bullish scenario.
- The reason I am assuming the bullish scenario is because the weekly chart shows us a market that has been bullish, then sideways, and is bullish again. 
- Perhaps we will see some consolidation, but I think the downside might be limited to $120. 
- I am considering being more patient and preparing dry powder for $120 area instead of $125. 

PEP Weekly Chart

(click to enlarge)

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