Investors will be keeping an eye on if the beverage maker can continue to increase sales volume and what, if any, impact may be had on the company’s dividend.
There are a large number of multi-legged option strategies that lend themselves to Coca-Cola stock providing outsized gains after earnings than current option pricing is predicting.
It’s notable on this chart that, despite the recent small upturn from a wider January sell-off, sector rotation appears to show that investors are positioning themselves to be prepared for the Federal Reserve to increase interest rates to combat inflation.
Nearly all of these sectors reflect “necessities” and are considered sectors where consumers will focus their spending power in inflationary environments.
This category includes things like foods and beverages, household goods, and hygiene products as well as alcohol and tobacco.
It’s because this sector is composed of “essential” goods for consumers that the consumer staples sector is considered a relatively “safer” bet during times of inflation.
An analysis of recent option activity combined with technical analysis of share price movement can help chart watchers gain valuable insight into the overall sentiment toward Coca-Cola stock.
This chart highlights how the Coca-Cola share price has maintained a near constant upward trend since its dividend date in early December, marked with the small “D” on the bottom axis of the chart.
The purple bands on this chart are an extreme historical volatility range formed by 4 standard deviations of 20-day Keltner Channel indicators, which depict price levels that represent a multiple of the average true range for Coca-Cola stock.
The average true range has become a standard tool for depicting historical volatility over time.
Both of these figures reflect a bullish outlook toward Coca-Cola stock; however, further analysis is required.
11, the next weekly option expiration date, the single option with the highest open interest is the $62 call, with 8,000.
18, the next monthly option expiration date, the single option with the highest open interest is the $60 call with 44,000.
That means that a trader is placing a $4.2 million bet that Coca-Cola stock will move more than current option pricing is projecting.
The Keltner Channel indicator displays a set of semi-parallel lines based on a 20-day simple moving average and an upper and lower line.
Coca-Cola shares recently reached a new 52-week high in the days before earnings, as the company has benefited from inflation-based sector rotation.