Short Trade Idea
Enter your short position between $78.11 (the lower band of its horizontal resistance zone) and $80.41 (the upper band of its horizontal resistance zone).
Market Index Analysis
- The Coca-Cola Company (KO) is a member of the Dow Jones Industrial Average, the S&P 100 Index, and the S&P 500 Index.
- All three indices trade in bearish chart patterns with above-average bearish trading volumes.
- The Bull Bear Power Indicator of the S&P 500 is bearish with a descending trendline.
Market Sentiment Analysis
Equity futures are moderately higher this morning following yesterday’s volatile session. The impact of AI on businesses and their competitiveness continues to pressure company shares across sectors, especially amid lofty valuations. A severe disconnect exists in software companies, where their outlooks are muted, revenue growth is slowing, but most analysts increase their expectations. Minutes from January’s FOMC meeting are in the deck, while earnings from DoorDash, eBay, and Analog Devices will provide further insights into consumer spending and technology. Volatility could persist throuh Friday, when markets will receive January’s PCE and consumer confidence data.
Coca-Cola Company Fundamental Analysis
The Coca-Cola Company is one of the world’s largest beverage companies, with a recent push into healthy alternatives and bottled water. It began paying dividends in 1920 and, as of 2019, has increased its dividend for 57 consecutive years. It also has a high level of brand loyalty.
So, why am I bearish on KO following its latest earnings release?
Coca-Cola missed revenue estimates, beat expectations on earnings per share, but issued a sluggish 2026 growth outlook amid intensifying beverage wars with Pepsi and Keurig Dr. Pepper. The 1% growth in global unit case volume, indicative of consumer resistance to continued price increases, is another worrying development for KO. I am equally wary of the ongoing $18 billion IRS tax dispute liability. The $960 million non-cash impairment charge on its BODYARMOR sports drink brand highlights a strategic misstep, and I see more execution risks once its new CEO takes over in April.
Metric | Value | Verdict |
P/E Ratio | 26.17 | Bearish |
P/B Ratio | 10.52 | Bearish |
PEG Ratio | 2.47 | Bearish |
Current Ratio | 1.46 | Bearish |
ROIC-WACC Ratio | Positive | Bullish |
The price-to-earnings (P/E) ratio of 26.17 indicates KO is an expensive stock in its industry. By comparison, the P/E ratio for the S&P 500 Index is 29.41.
The average analyst price target for KO is $82.49, suggesting negligible upside potential amid accelerating downside risks.
Coca-Cola Company Technical Analysis
Today’s KO Signal
- The KO D1 chart shows price action inside a horizontal resistance zone.
- It also shows price action between its ascending 0.0% and 38.2% Fibonacci Retracement Fan levels.
- The Bull Bear Power Indicator is bullish with a negative divergence.
- The average bearish trading volumes have increased so far in 2026.
- KO advanced as the S&P 500 Index retreated, a bullish confirmation, but bearish signals are rising.
My KO Short Stock Trade
- KO Entry Level: Between $78.11 and $80.41
- KO Take Profit: Between $65.35 and $67.92
- KO Stop Loss: Between $84.14 and $86.66
- Risk/Reward Ratio: 2.12
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