Analysis: KO PEP

After posting stellar earnings recently, the stock of soft drink and snack food giant PepsiCo (PEP) remains strong and poised for a move higher. Rival Coca-Cola (KO) released its quarterly results here on Tuesday morning and like PepsiCo handily beat earnings and boasted of price increases across the board. Not only that, it believes these increases will stick for some time. Bad news for the consumer, good news for shareholders of Pepsi.

PEP's chart is consolidating through a cup-and-handle pattern here, with strong money flows and decent price action. The recent pullback into the handle is on lower volume, which is what you like to see in a tight consolidation.

The weekly chart (TrendSpider) is bullish with the aqua color leading here. When this changes to blue it will be a GO.

Parabolic SAR (dots) just turned up and it appears there is some follow through on that longer-term chart. The Relative Strength Index (RSI) also broke a long downtrend line. All in all, we like this steady mover to continue making gains as the market rises or even goes sideways.

At the time of publication, Action Alerts PLUS was long PEP.