Coca Cola Bottling Corp. Taps Record Highs! We Reveal the "Secret" Why
COKE stock is it! The fundamental explanation for the rally... is NOT!
by Nico Isaac
Updated: November 24, 2021
One of the greatest mysteries of modern civilization has been what makes the iconic soft drink Coke so... well, Coke-like.
Coca-Cola Co. guarded the recipe for its eponymous beverage like the Holy Grail. Upon its invention in 1886 by Atlanta druggist John Pemberton, the never-tell formula was committed to the memories of a handful of top executives, then written down on a piece of paper dubbed "7X" and locked in a high-security vault in Sun Trust Bank of Atlanta for over a century.
But in 2011, that classified list of ingredients was donated to the World of Coca-Cola for the public to see, which revealed the 135-year-old secret of how the drink is made.
The same can't be said of another great mystery that persists to this day. Namely, why the percentage of traders who lose money -- around 80% -- has not changed since the Buttonwood Agreement created the first securities trading in 1772.
One might think there's a cloak-and-dagger traders' society who knows the secret formula for success.
Not exactly! In truth, there's no such thing as fail-proof trading. If you invest in stocks, you will lose money at some point. BUT ... we believe you can reduce risk and increase your ability to identify high-confident setups in the markets you follow:
The Elliott Wave Principle is how. If you're new to it, here is a summary of its underpinning dynamics:
- Collective psychology swings from excessive optimism to pessimism, and back again
- This psychology drives price patterns that are visible on market charts
- These price patterns repeat at every degree of trend, so they are predictable
- Once you know which specific Elliott wave pattern your market is in, you can make a probability-based forecasts. In general, some 70% of price action develops within 5 core structures: Impulse, diagonal, triangle, flat and zigzag
That's how it works on paper.
As for how it works in real time, let's look at none other than the recent performance of Coca-Cola Bottling Corporation (Ticker Symbol: COKE). This chart of the stock shows that, after an initial burst higher in May and June 2021, prices were a flat as a stale soft drink. But then came an upward thrust to $170 per share in early November, a new record high.
Mainstream analysts saw the powerful move up in progress and pointed to strong Q3 growth numbers as the catalyst. Wrote the November 12 Motley Fool:
"Why Coca-Cola Consolidated Stock Jumped 14% This Week
"The bottler announced solid earnings results despite supply-chain and cost challenges...Operating income jumped 32% in the period and is up 60% since the start of the year, management revealed in a filing with the SEC."
This is the classic formula of fundamental market analysis: First, see what prices do. Second, find reasons in the news to explain that move.
But that formula only allows traders and investors to react to price action, not anticipate it.
Again, that's where Elliott wave analysis makes a difference. In this case, on September 29th! That day, and long before the Q3 profit reports for COKE were even in their incubation -- our Trader's Classroom editor Jeffrey Kennedy saw a developing bullish opportunity ahead.
There, Jeffrey showed this chart of COKE, which identified the 5-month long, sideways price action as a fourth wave zigzag. The next price move, he said, would look like what happens if you shake-up and then open a bottle of Coca-Cola!
Here is an excerpt from Jeffrey's analysis:
"Lean back from your computer. Go through the process of elimination. Does everything we're seeing look like an impulse wave, a diagonal, a flat, and so on?
We can count that mess as a zigzag. Once we start moving back above the wave B extreme of the triangle, that would clear the way for further rally towards $500. This is a clean, clear, simple and high confident scenario."
From there, COKE began to rise in late October and exploded to record highs in November.
In the 2013 Amazon Finance bestseller, Visual Guide to Elliott Wave Trading, co-author and Elliott wave forecaster Jeffrey Kennedy remarked:
"My best advice to you is to start your search by asking the question, 'Do I see a wave pattern I recognize?' You should look for one of the five core Elliott wave patterns...
"Once you learn to identify them quickly and with confidence, these simple forms will become the basis for identifying all your trade setups."
Find out which stocks are on Jeffery's Traders Classroom radar today!
A Refreshing Perspective on Market Behavior!
There are few images as iconic as the red-and-white Coke logo. You recognize it at a glance.
Imagine looking at any stock in any time frame and knowing if its pattern is recognizable, AND then using those patterns to form high-confident trade set-ups?
That's exactly what Trader's Classroom sets out to do. This incredible service equips new and veteran traders alike with the educational tools to identify opportunity in the world's leading ticker symbols.
Drink it in today!
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