PepsiCo Stock Analysis: Is PEP Oversold and Ready for a Rebound?

PepsiCo (NASDAQ: PEP) stock is drawing attention as technical indicators on the monthly chart suggest it is currently the most oversold it has been in over two decades. As of now, PepsiCo shares are trading around $129.39, a level that aligns closely with a long-term supportive trendline dating back to January 2009.

This key trendline could offer short-term support due to its historical significance. However, technical support does not guarantee a price reversal. The next key support levels to watch are May’s low of $127.76 and $125, which sits directly on the trendline. If PepsiCo stock breaks below this critical support, it could trigger another wave of selling pressure, potentially pushing the share price down toward the COVID-19 lows of $100–$104 — a further 20% drop from current levels.

On the flip side, if PEP shares manage to hold above support and close above $130, there’s potential for a short-term rebound. A rally toward $140 during June and July could be on the cards, especially given that these months have historically been more favourable for the stock.

Key Technical Indicators:

• MACD is still falling but entering oversold territory.

• RSI (Relative Strength Index) is reading 28, marking the second consecutive month in oversold conditions.

• These oversold signals could encourage some buying interest in the weeks ahead.

Macro Factors to Watch:

• Geopolitical tensions between the U.S. and other nations continue to weigh on market sentiment.

• Ongoing uncertainty around international trade deals may impact overall investor confidence.

Conclusion:

PepsiCo stock is at a crucial technical juncture. While the long-term support trendline may act as a floor for now, investors should monitor price action closely. A decisive move above $130 could signal a bullish reversal, while a breakdown below $125 may point to deeper downside risk. As always, keep an eye on the broader macro landscape and technical indicators before making any investment decisions.