BUY, SELL, HOLD (2)

Coca-Cola Stock Flat As Company Moves to Pull Coconut Water Brand

Technical trouble has been plaguing Coca-Cola stock, too

Deputy Editor
Oct 5, 2020 at 10:45 AM
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The shares of Coca-Cola Co (NYSE: KO) are trading down 0.1% at $49.33 this morning, after the beverage company announced it will discontinue the production of its Zico coconut water brand by the end of 2020, according to a Coke spokeswoman. Additionally, Coca-Cola confirmed that Diet Coke Feisty Cherry, Coke Life, Northern Neck Ginger Ale and Delaware Punch are under review as well. 

On the charts, the stock has continued its trend of trading sideways, though on Sept. 3, it surged to $52.14 -- its highest level since the broader market's mid-March pullback. Since then, however, the equity has resumed its downwards trend, succumbing to pressure at the $50 level. Today's small stumble isn't doing KO any favors either, with the shares' 200-day moving average looming as layer of resistance. Year-to-date, Coca-Cola stock is down 10.9%. 

Meanwhile, the options pits are flashing some bearish activity. The equity sports a 10-day put/call volume ratio of 0.50 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands higher than 74% of readings from the past year. This indicates a greater-than-usual appetite for put options of late. 

Traders looking to speculate on KO's near-term trajectory should consider options. The stock's Schaeffer's Volatility Index (SVI) of 22% is in the 14th percentile of its annual range, suggesting short-term options are pricing in relatively low volatility expectations. In other words, Coca-Cola's near-term options are attractively priced at the moment.

 

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