Ambev S.A. is Nearing a Bullish Breakout

The fourth quarter’s almost done, and what a year it’s been. 2019 gave us a little bit of everything, didn’t it? Trade war drama, huge swings in price, rate cuts, and historically low unemployment to boot.

Don’t forget about the freshly tallied impeachment vote, either.

For months now, bears have been shorting the market, waiting for the “crunch” to come. Stocks looked overbought since late October, but the market just kept on rising.

Now, though, bears are the ones feeling the heat. Having gotten scorched for much of Q4, pessimistic investors continue to believe that a major correction is in the works.

And you know what? They’re right; equities will sell-off. But who knows when that’s going to happen. As of today, the market remains within range of another surge.

When the correction (albeit a small one) hits, it might not even stick. And until a downturn arrives, we’ll continue to make money on long trades – most of which have performed very well over the last few weeks.

Ambev S.A. (NYSE: ABEV), for example, appears ready to continue its run in 2020.

In the weekly candlestick chart above, you can see that ABEV is back on the warpath after selling-off in Q3. The stock bottomed out on the lower Bollinger Band (BB) in November, and now lingers near its October high – a point of key resistance.

The current weekly candlestick is trading above the last seven, and the stochastic indicator remains miraculously below 80, suggesting that ABEV isn’t overbought quite yet.

Most importantly, ABEV just broke out of its minor bearish trend, signaling a bullish breakout that will soon be confirmed if the stock keeps rising. As an added bonus, we have two slightly higher lows logged since May.

Should ABEV trade slightly above the current week’s high (and key resistance), it might make sense to go long with a trade trigger of $4.75. Past that, another level of resistance sits at $5.40 – the yearly high. If ABEV can breakout past that price level, a huge rally could follow.

So, over the next few weeks, watch for a bullish move from ABEV. The stock had a rough 2019, and now that the future looks a little brighter for international stocks (ABEV is based out of South America), ABEV could be ready to surge.


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