More companies continue to pull out of Russia. Here’s how to trade these three now.
It has not been a fun ride for many stocks through the first months of 2022.
Energy stocks aside, the market has been buried and the above observation holds for PepsiCo (PEP) – Get PepsiCo, Inc. Report, Starbucks (SBUX) – Get Starbucks Corporation Report and McDonald’s (MCD) – Get McDonald’s Corporation Report as well.
The best performer is PepsiCo, which is still down about 10% from its high. McDonald’s is down more than 17% and Starbucks is off by more than 30%.
Aside from poor recent performance, this trio has something else in common: They are all pulling out of Russia.
The exodus of U.S. companies from Russia is growing by the day. Visa (V) – Get Visa Inc. Class A Report and MasterCard (MA) – Get Mastercard Incorporated Class A Report packed up shop. Apple (AAPL) – Get Apple Inc. Report, Harley Davidson (HOG) – Get Harley-Davidson, Inc. Report and Disney (DIS) – Get Walt Disney Company Report have too. Even Bumble.
It’s the same outside the US as well. H&M is out. So are Ikea and Adidas (ADDYY) . Spotify (SPOT) – Get Spotify Technology SA Report, Canada Goose (GOOS) – Get Canada Goose Holdings, Inc. Report and BP (BP) – Get BP Plc Report have called it quits too.
That has left many of the stocks suffering short-term hits. So how do these three look?
Trading Starbucks Stock
`Weekly chart of Starbucks stock.
Chart courtesy of TrendSpider.com
Starbucks stock tried to hold the $100 area and initially it did in early January. But the selling quickly intensified and the shares broke down to the low-$90s.
The stock ended up filling the gap at $91.28, but it has continued lower since. For now, Starbucks is finding its footing at an interesting area. It includes the 200-week and 50-month moving averages, as well as the 50% retracement of its entire trading range from the Covid lows.
From here, the lows are important. A break of this week’s low could put $80 in play, followed by the low-$70s.
On the upside, let’s see if Starbucks can reclaim the $90 to $91.50 area. Above that puts the declining 10-week moving average in play, followed by the $100 area.
Trading PepsiCo Stock
Daily chart of PepsiCo stock.
Chart courtesy of TrendSpider.com
PepsiCo and Coca-Cola (KO) – Get Coca-Cola Company Report reported earnings on the same day, Feb. 10. PepsiCo did not react well to earnings, while Coca-Cola traded pretty well on its results.
Once support broke, PepsiCo stock dropped right to the support level we were watching. Now that it’s finding its footing in this key zone, the bulls need to see PepsiCo hold this week’s low.
Look at the zone it’s in now. It includes the 200-day and 50-week moving averages, the weekly VWAP measure, the $158.50 breakout mark and the February low.
If PepsiCo can reclaim $160.25, it puts the declining 10-day in play. But what the bulls are really looking for is a bounce back to the 50-day moving average. Before it gets there, though, it will need to reclaim the 10-week moving average.
On the downside, a break and close below the lows could put $150 in play.
Trading McDonald’s Stock
Weekly chart of McDonald’s stock.
Chart courtesy of TrendSpider.com
As for McDonald’s:
Right now we have a three-wave pullback in McDonald’s, but whether it’s finished declining is unclear. If the shares continue lower, the $215 to $217 area could be in play, along with the monthly VWAP measure.
If the stock bounces, I am looking at the $234 level. Above that are the 50-week, 10-week and 10-month moving averages.
Even if McDonald’s rallies, it might not be done going lower. If that’s the case, the 200-week and 50-month moving averages could be a landing spot in the $200 to $210 range.
This was also a breakout zone and was strong support one year ago.
