Tomorrow can be setting up to be reversal day... Today was the third consecutive gap (Pattern = BULLISH THREE GAP DOWNS) and close at or near the lows... A slightly lower open and reversal to the upside is very likely. Also, A new modest low would complete the Wave-v of the minute wave. BTU is setting up to be one more low away from a reversal that should at least carry to 4.8 - 5.6. A remote possibility is a gap up above today's high causing another type of reversal... (Unlikely)
As per EW theory, this leg down would be an over throw of an ending diagonal. Once this is complete and it breaks the downward wedge (Currently at 4.3) then this will move very quickly to 4.80 level. Potential downside targets are 3.86-3.71.
It has to hold the prior lows or maybe move lower intra-day and then bounce strongly... But, RSI, CCI, %R and many other indicators are showing bullish divergences.
My 2 cents on the matter...
MNST will make a retracement to $136-$140 level, but after that it is highly likely that a nasty Wave-iii of 3 will unfold and will take the stock anywhere between $95-$110 (Depending on the extension of Wave-i, which is 144.35 to 127.7). Why? Cuz, the broader market will also take nose dive once 2150-2160 level is touched.
What would negate the above EW count? If MNST can take out the 144.69 high... but, I really doubt it.
I rest my case.... Make a 70% gains on my options trade. This is just the Wave-1 of the bigger wave-A decline Now expect a retracement (if today's low holds) to no more than 136-140 range depending on the fib retracement. Once that is done then this is heading lower in a hurry for Wave-3 of Wave-A
Somebody is supporting the $137 level... At least for now! Cuz once it breaks the 134-137 box then no stop until 125-120
The AH volume is pathetic @ 170 K... Which eludes the fact that the institutional players are not involved. So, the real tell would be how it trades tomorrow... But, either way looks like a gap down might be result based on the current levels. But if gaps below the $134 level then some technical selling will take this down to $125 ish level in no time. Let us see how it trades for the next couple of hours first...
This is traditionally the weakest Q for MNST, couple that with strong $ and global slow down. Also, law suits and related costs... Not to mentioned the stock has gapped up the last 3 earnings and not really pulled back or consolidated the gains (Typical for EW Wave-5 action) The neutralizing factor could be the closure of KO deal... Will hav to wait an see.
I did not know that when I posted the above. But, that could a double edged sword when market is in a sell first ask questions later mode... Look at GMCR/SODA getting clobbered today. Both these stocks were already beaten down... MNST is priced for perfection, unless the earnings are stellar and they announce some other posiitve news in lieu of guidance... You are likely to see a gap down
Some decent insider selling. The only buys were exercising their options... The question is how much upside does one expect from these levels? 5%, 10% or 20%... The stock has already gapped up the past 3 earnings and longs expect that to happen every quarter??
It is apparent that technicals are gibberish to a novice like you... and what is with the language? For an old guy, I expected a little bit more courtesy. Anyways, we will find out Friday... My position is very simple, it either reverses from these levels or might have one last exhaustion gap up and then decline sharply. Check out QLYS post-earnings drop... Market is in the mode of shoot first and ask questions later mode for anybody that misses or guides lower...
Also, if you think I'm just making stuff up... Check out my post on stocktwits (My handle is "Options_Only_Trader") I've posted the EW chart for MNST
So, the company's best use of it's cash is Buy back? KO deal is already priced and is a non-factor on the positive side. I guess you've no clue about the deteriorating technicals on the charts and you've bearish divergences all over the place. Not to mention that the broader market is the verge of a major top for years to come. Cover my short? In today's age why would i touch the stock when I can place my trade via options. Own, a bunch of Sep puts and some May puts (In case we get that 20% drop). The way i see it is the best case scenario is an exhaustion gap or a downside gap would complete the island-reversal of "monster" proportion :)
I'll indulge your comment on the fundamental aspect of it... What is the catalyst that the company could say during the earnings call that would justify another 10% or higher upside move? Just wondering...
MNST seems to have completed 5 waves of the EW pattern going back to mid 90's and if that count is indeed true then expect a nice 20%-30% gap down after earnings (If they miss and/or guide lower, also any possible issues with the KO deal) The other possibility is a small gap up followed by a reversal (Often called exhaustion gap) Either way, I think the major run in the stock that has lasted 20 years is coming to a grinding halt. Also, to draw parallel check out the action of MNST just before the 2007 top.