A Coke and a SINA

Have a Coke and a smile -- unless you are a bull. If you are a bull on Coca-Cola (KO), these have been challenging times. Sure, KO is still up nearly 7% for the year, but there's a good chance it gets erased before the fourth quarter ends. In fact, it may get erased in the next few weeks if bulls don't step up right now.

Coke (KO) Source: StockCharts.com View Chart » View in New Window »

Looking at the KO chart, a head-and-shoulders pattern has developed since the beginning of September. A break of the neckline puts about a $2.25 measured move to the $35 level. Fortunately, there is a lot of support around $35, so I would expect buyers to step up at those levels. A play I'm looking at here would be to buy the November $37 put and then sell 2x November $35 puts for a cost of $0.30. If KO falls to $33, I would be all right buying the stock, which is roughly breakeven. If KO pushes down to $35 quickly, I may consider adjusting my position to become outright long in the stock. The CCI is oversold and KO has bounced off this trendline and CCI level in the past but it has not changed the long-term direction, which is bearish. For those playing a bounce, I'd be happy to catch a buck....126 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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