PepsiCo Near Important Moving Averages; Transocean Closing in to Resistance

By Traders Huddle Staff After stocks closed yesterday with little change in a lackluster session, in which slightly better than expected economic data was not enough to spark a broad upside move amid Ben Bernanke testimony and a flurry of earnings, we identified the following trading ideas. Shares of PepsiCo PEP closed the trading session at $66.38 near its 50day and 200day moving averages currently set at $65.13 and $65.43 respectively. PepsiCo's price action is above these important levels, which could translate into a trading opportunity, particularly amid the catalyst of its earnings report scheduled for next week. On average analysts expect a profit $1.13 per share on revenues of $19.92 billion. Although the price action is above important moving averages, it's key to highlight that the 50day moving average is currently above the 200day moving average, signaling that buying the dip strategy might be the best setup out there. Looking at peaks and troughs horizontal support and resistance levels, we can see current calculated support at $62.25 and calculated resistance at $65.40. Traders when planning their trades should also evaluate these levels, as they provide an insight into the latest price action. Another trading idea is Transocean RIG. The largest offshore drilling contractor in the world ended the session at $48.87, very near its calculated resistance at $49.16. Transocean's price action is just below the key resistance levels, which makes it difficult to buy. Traders don't have a clear entry point for Transocean, as the stock is well above support, however, as the stock pulls back towards $38.21 it will definitely provide a reference point to establish a trade. On the other hand if the stock decides to break above resistance level then traders will get an opportunity to establish a position as the stock moves to a higher range. Transocean RIG is the largest offshore drilling contractor in the world. The Company owns and operates a versatile fleet of mobile offshore drilling units, inland drilling barges, and other assets utilized in the support of offshore drilling activities worldwide. Transocean specializes in technically demanding segments of the offshore drilling business, including deepwater and harsh environment drilling services.