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News

Crude oil spikes on US inventories report

News

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News

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GBP/USD price may correct lower

News

Goldman Sachs’ stock surges on upbeat Q2

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Caution ahead of Netflix’s earnings?

Asset Watch

Could PepsiCo provide cover over the next two weeks?

Tuesday June 18, 2024

The FOMC delivered a hawkish surprise last week by pencilling in fewer rate cuts than expected in 2024. And with investors concerned that higher-for-longer interest rates could place unnecessary strain on the economy, uncertainty has crept back into the S&P 500.
The next two weeks are also one of the worst seasonal periods of the year for the index. Typically, it’s a straight line lower in the back half of June before the bull market resumes in July.
With defensive sectors like consumer staples often outperforming during periods of volatility, could PepsiCo provide short-term solace?

The stock is down by nearly 17% from its May 2023 highs, and key support levels have entered the picture. PepsiCo’s 200-week moving average (the blue line) has been an important long-term trend indicator. After false breakdowns in 2018, it continued to climb higher. Similarly, an intraweek breakdown was bought in late 2023 and higher prices followed.

As PepsiCo closed slightly below its 200-week MA last week, the price action in the days ahead will be key. If the stock voids the breakdown and rallies back above the 200-week MA, it could provide the bulls with some short-term momentum.

If not, price support is present in the $160 area, as it’s near the August 2021 highs and the October 2022 and 2023 (closing) lows. Consequently, the zone could be an additional anchor to help PepsiCo make a comeback.

So, will defensive names like PepsiCo outperform over the next two weeks, or should you continue to ride Big Tech’s momentum?


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