Monster Beverage Dropped. Is a Rebound Next?

2022년 8월 15일

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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