Medium term
Trade view / 02 June 2016 at 9:20 GMT

Monster Beverage Corp – a fast-moving trade is setting up

Trader /
United States

Shares of energy drinks manufacturer Monster Beverage Corp (MNST:xnas) have seen some wild swings already this year. While the jury is still out as to the stock's path of least resistance through a six to twelve month lens, in the near term a better directional move higher or lower looks to be in the cards very soon.

When Monster Beverage reported its latest quarterly results in late April it posted better than expected results as a result of distribution improvements through its partner Coca-Cola Co. The stock surged after the news but has been in a consolidation phase since.

On the multi-year weekly chart we see that MNST stock has largely been consolidating in a wide and choppy range since February 2015. This consolidation phase is taking place in a broadening top formation, which is concerning but for now also note that at the February and April lows the stock held its blue 100-day simple moving average as support.

Monster Beverage Corp
Source: eSignal

On the daily chart note that since gapping higher after earnings in late April MNST stock has been consolidating in a tightening price formation, which we may label as a wedge formation. The stock now also sits right upon its eight and twenty-one day simple moving averages. Very simply, once the stock makes a clear directional move either up or down on a daily closing basis that pushes it out of this consolidation range, then traders can jump on a trade in said direction. 

Monster Beverage Corp
Source: eSignal

Management and risk description

From a risk management perspective it is important to keep in mind that shares of Monster Beverage can be a quick mover, which is to say that operating with reduced size and somewhat wider stops makes sense.


Entry: Buy MNST stock or CFD upon a daily close above $152.50. Alternatively, sell/short the stock or CFD upon a daily close below $149.

Stop: Upon a  break higher – $148. Upon a break lower – $153.

Target: Upon a  break  higher – $160. Upon a break lower – $140.

Time horizon: 2–4 weeks

— Edited by Clare MacCarthy

Non-independent investment research disclaimer applies. Read more


The Saxo Bank Group entities each provide execution-only service and access to permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on or as a result of the use of the Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail