Coca-Cola Stock Flat Ahead of Earnings

The soda giant reports earnings before the open tomorrow morning

Assistant Editor
Oct 21, 2020 at 2:05 PM
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Beverage concern Coca-Cola Co (NYSE:KO) is scheduled to report third-quarter earnings before the market opens on Thursday, Oct. 22. The security has struggled in the face of the pandemic, with the company announcing it would be pulling its coconut water brand from stores and reviewing other beverages, as well. Below, we'll take a look at Coca-Cola stock's technical setup, as well as its earnings history.

KO was cruising into 2020, but promptly shed almost half its value during the height of the mid-March COVID-19 selloff. It's been a long road back, with the $51 emerging as resistance, and the shares' 100-day moving average containing any pullbacks in recent months. The $50 level is also an area to watch, as it coincides with its -10% year-to-date level.

Daily Stock Chart KO

Pessimism is growing in the options pits, where puts are popular. This is per KO's Schaeffer's put/call open interest ratio (SOIR) of 1.27, which sits in the highest percentile of its annual range -- meaning short-term options traders have rarely been more put-biased. 

Traders looking to speculate on KO's near-term trajectory should consider options. The stock's Schaeffer's Volatility Index (SVI) of 27% is in the 20th percentile of its annual range, suggesting short-term options are pricing in relatively low volatility expectations. In other words, Coca-Cola stock's near-term options are attractively priced at the moment.

For the stock's earnings history, KO has closed higher the day after the company reported earnings in six of the past eight quarters, including a 6.1% jump in July 2019 and a 3.2% pop this January. Over the past two years, shares have swung an average of 3.6% the day after earnings, regardless of direction. This time around, the options market is pricing in a slightly higher swing of 4.4%,

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