Trading Nation

'Always buy all-time highs' as Coca-Cola still has room to run, market analysts say

Coca-Cola is effectively diversifying, says strategist

Coke's pop isn't over.

So says technical analyst Mark Newton, president and founder of Newton Advisors, whose hard look at Coca-Cola's stock charts has him feeling bullish on the beverage giant even after its blowout earnings beat.

Coca-Cola rallied more than 6% after topping earnings expectations and raising its revenue forecast Tuesday morning, with CEO James Quincey telling CNBC later in the day that "the storm" of global economic weakness the company had anticipated "never arrived."

And, while Coke's rally over the last six months has been "a good move," it still has a ways to go to reach its full potential, Newton said Tuesday on CNBC's "Trading Nation."

"In the last six years, the stock has done largely nothing," he said, pointing to a chart going back to 1996. "Technically, it does still look like Coke can make another 4[%] to 5% on the upside before hitting any resistance."

Newton pointed out that this year, the stock broke out above the $43-a-share peak it hit in July 1998, marking an acceleration in the shares that looks to him like they're poised to continue.

"[The] recent acceleration has carried this out of nearly a 20-year base," Newton said, adding that it's "very bullish for the stock near term, and on an intermediate-term basis, I think Coke really starts to outperform."

Add in the fact that Coke is starting to outperform the broader consumer staples sector on a relative basis, represented on the chart below by the line's slight upturn over the last several months, and Coke is looking attractive to Newton.

"I do like Coke," Newton said. "I think it's finally time to have a Coke and a smile. It's right to bet on this stock, and near term and intermediate term, it likely can show some good outperformance."

BK Asset Management's Boris Schlossberg was also bullish on the name.

"From a trading point of view, always buy all-time highs, especially in something that's a bellwether like Coke that's been around forever because I think it's a very, very bullish price signal," he said in the same "Trading Nation" segment.

And although recent data have shown that fewer and fewer consumers are drinking carbonated, sugary beverages, Schlossberg felt strongly about management's ability to navigate that secular trend.

Coke's ability to shrug off that trend in the latest earnings report, for one, is "a testimony to their management," said Schlossberg, who is managing director of FX strategy at his firm.

"They've been so adroit at pivoting away, at diversifying their portfolio, and, more importantly, also expanding their footprint, I think, in emerging markets where there's lots and lots of nations in the Middle East and Southeast Asia where there is no alcohol," he said. "So, I think, to their credit, they're able to manage the transition really well and that speaks to really good production going forward, so I'm very bullish the stock. I think it's really going to be a buy going forward."

Coca-Cola is up 15% year to date, and 21% over the last 12 months. The shares settled a little more than 6% higher Tuesday as investors digested the earnings.