So where could KO go from here. If we take Merck, that also topped at 90. as an example it could go to $22.82. Of course comparisons with GE and similarly patterned stocks $20 is definitely not out of the question. Clearly it will not be a straight line as around the $38 level there is a lot of resistance, it may even be a trade at that level. More interesting and continueing the reverse engineering what does this mean for the US dollar (at least against the Euro). Here again is food for thought as EVERYBODY knows that the buck is going to go down. Perhaps not.

Here are two charts, the bottom one is that of the Euro against the US Dollar. More than a year ago I simple guessed that the Euro might stop at about 161. The reason no other than that it happens to be a Fibo ratio. Just like the Can $ dropping to 61.8 cents to the US dollar back in 2003 it made sense to put that level on it. Supposing that that would indeed transpire it followed that anyone holding KO would get creamed. Coke makes syrup that is exported and sold all over the world in local currency. Over half their income is derived from overseas and as the process is fairly simple it stands to reason that this company would suffer tremendously from a rising dollar. With a lag the correlation is pretty obvious.