About 3 years ago this stock looked like a sell already at about $65, then again at about $70 and here we are at $78. Now it really looks like a sell, furthermore a very plausible count is again presenting itself, as shown on this semi-log chart. One can never exclude the possibility of an attempt to double top (about $90), but otherwise everything is in place for a rather big decline. The initial target, as usual, is the 4th of previous degree, just under $20! In more detail;

What adds a little confidence to this count is the rather obvious “megaphone” which is actually an expanding triangle and therefore has to be a fourth wave (of c of B)! Moreover we are at the top of the channel and the RSI and MACD are both going down.

Fundamentally this stock trades at a high p/e of 20+, yields 2.7% and has a Beta of 0.43. If you own it, sell it, if you do not own it , it is probable a good short but if options are used make sure you have time on your side.

Just like Pepsi, Coke may have some trouble ahead, again there is nothing wrong with the stock, it yields 2.7% and trades at a P/E of about 13. The stock has been out of phase with the market for some time now but the pattern is pretty clear. Looking at a more detailed chart;

The c-leg up has already travelled as much as the a-leg (a common equality), and is forming a wedge of sorts that does not leave much room, in fact the $70 high may be as good as it gets. A normal 62% retracement of the entire bull market occurs at a little over $32. No idea why this might happen but soon 1/3 of North American (and the world?) will be overweight. Soon diabetes will affect 15/20% of the north American population. Schools are getting annoyed with vending machines that do not sell the right stuff etc.etc. etc. In short there are many reasons why selling sugared water may become less popular soon.

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.