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Saturday, April 17, 2021 7:49:30 PM
A Potential Monster (MNST) Breakout Looms
By: Joe Duarte | April 4, 2021
Monster Breakout Looms
Earlier this year, I suggested that shares of energy drink company Monster (MNST) would be interesting as they were engaged in a caffeine war with Starbucks (SBUX). At the time, it seemed as if Monster might get a bit of an edge on Starbucks. Alas, so far, both stocks have been range-bound, and the caffeine wars – well, they've been tame to say the least.
However, this may be about to change, certainly for Monster, and perhaps even for SBUX. But in this article, I want to focus on the former, given its interesting chart pattern and the rumblings of tight supplies in the coffee market, which may or may not play out, but would likely be more of a negative on SBUX.
So, here's what I like about MNST. The stock tumbled earlier in the year, but has slowly come back, and is now reaching a key decision point near the $95 area. Moreover, as summertime approaches and the world adjusts to the new COVID reality – whatever that is - expect more outdoor activities in the city, such as a return to skateboard parks, and so on as well as an increase in construction, and perhaps even outdoor music events and a return of the X games where Monster rules. In other words, as the weather heats up and major events and activities that cater to the energy drink crowd return, Monster's sales are likely to kick up.
On the technical side, the Accumulation Distribution (ADI) and On Balance Volume (OBV) are very constructive, as is the raw volume data. Moreover, the Volume by Price (VBP) indicator shows a key resistance level at $92. If that gets taken out, as I'm expecting it well could, the stock should be off to the races.
Certainly, the directional data for MNST options suggests a very bullish bias and the implied volatility (IV) is well below the historical volatility (HV) – all very positive signs. A move above $95 would likely lead to an extended uptrend over the next few weeks barring a major market event.
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By: Joe Duarte | April 4, 2021
Monster Breakout Looms
Earlier this year, I suggested that shares of energy drink company Monster (MNST) would be interesting as they were engaged in a caffeine war with Starbucks (SBUX). At the time, it seemed as if Monster might get a bit of an edge on Starbucks. Alas, so far, both stocks have been range-bound, and the caffeine wars – well, they've been tame to say the least.
However, this may be about to change, certainly for Monster, and perhaps even for SBUX. But in this article, I want to focus on the former, given its interesting chart pattern and the rumblings of tight supplies in the coffee market, which may or may not play out, but would likely be more of a negative on SBUX.
So, here's what I like about MNST. The stock tumbled earlier in the year, but has slowly come back, and is now reaching a key decision point near the $95 area. Moreover, as summertime approaches and the world adjusts to the new COVID reality – whatever that is - expect more outdoor activities in the city, such as a return to skateboard parks, and so on as well as an increase in construction, and perhaps even outdoor music events and a return of the X games where Monster rules. In other words, as the weather heats up and major events and activities that cater to the energy drink crowd return, Monster's sales are likely to kick up.
On the technical side, the Accumulation Distribution (ADI) and On Balance Volume (OBV) are very constructive, as is the raw volume data. Moreover, the Volume by Price (VBP) indicator shows a key resistance level at $92. If that gets taken out, as I'm expecting it well could, the stock should be off to the races.
Certainly, the directional data for MNST options suggests a very bullish bias and the implied volatility (IV) is well below the historical volatility (HV) – all very positive signs. A move above $95 would likely lead to an extended uptrend over the next few weeks barring a major market event.
Read Full Story »»»
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Information posted to this board is not meant to suggest any specific action, but to point out the technical signs that can help our readers make their own specific decisions. Caveat emptor!
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