Constellation Brands, Inc. (STZ) is a major supplier of alcoholic beverages, including several brands of beer, wine and spirits. The stock closed Wednesday at $227.50, up 47% over the past 52 weeks and in bull market territory at 58% above its 52-week low of $144.00 on Jan. 5, 2017. The stock set its all-time intraday high of $229.46 on Jan. 2, 2018.
Constellation Brands reports earnings before the opening bell on Friday, Jan. 5, and analysts expect the company to post earnings per share between $1.87 and $1.96. The generic beer and wine market is expected to be sluggish, but Constellation has premium brands that consumers have been demanding. Plans to expand its premium brands inventory and spending on upgrading its Mexico-based beer operations could influence the earnings results. (See also: How to Invest in Liquor.)
The daily chart for Constellation Brands
Constellation Brands stock has been above a "golden cross" since April 17, when it closed at $170.12. A "golden cross" occurs when the 50-day simple moving average rises above the 200-day simple moving average and indicates that higher prices lie ahead. The 50-day simple moving average was tested between Sept. 26 and Oct. 3, when this average was $198.60.
The weekly chart for Constellation Brands
The weekly chart for Constellation Brands is positive, with the stock above its five-week modified moving average of $221.83. The stock is well above its 200-week simple moving average at $141.39, which is also the "reversion to the mean," last tested during the week of June 15, 2012, when the average was $17.67. The 12 x 3 x 3 weekly slow stochastic reading ended 2017 rising to 83.40, moving above the overbought threshold of 80.00.
Given these charts and analysis, I recommend buying Constellation Brands on weakness to my annual value level of $206.21 and reducing holdings on strength to my monthly and semiannual risky levels of $241.50 and $243.92, respectively. My quarterly pivot is $223.93. (For more, see: This Is the First Fortune 500 Marijuana Stock.)