Bud Light Maker's Stock Shows Signs Of Reversal Despite Stores Heavily Discounting The Beer

Anheuser-Busch Inbev BUD was trading slightly higher Friday amid an ongoing protest against its brand, which was caused after the company partnered with transgender influencer Dylan Mulvaney.

Cases of Bud Light are now being heavily discounted by some retailers looking to offload their inventory amid the downturn in sales. Since the controversy began on April 1 Anheuser-Busch has fallen about 16%.

The downturn in the stock could present an attractive opportunity for bullish traders who are comfortable with higher risk levels, because the stock has been less volatile recently and on Thursday, bounced up from the golden pocket.

Anheuser-Busch is also trading in an inside bar, and a break above or below this pattern could potentially indicate the short-term future direction of the stock. An inside bar pattern indicates a period of consolidation and is usually followed by a continuation move in the direction of the current trend.

An inside bar pattern has more validity on larger time frames (four-hour charts or larger). The pattern has a minimum of two candlesticks and consists of a mother bar (the first candlestick in the pattern) followed by one or more subsequent candles. The subsequent candle(s) must be completely inside the range of the mother bar, and each is called an "inside bar."

Want direct analysis? Find me in the BZ Pro lounge! Click here for a free trial.

The Anheuser-Busch Chart: Anheuser-Busch dropped 2.4% on Thursday, leaving a gap above between $55.79 and $56.57. Gaps on charts are about 90% likely to fill, which suggests the stock will rise to fill the gap and if Anheuser-Busch breaks up from Thursday’s mother bar, the stock may find resistance at the top of the empty trading range next week.

• Anheuser-Busch's inside bar leans slightly bullish because the stock formed the inside bar on Friday near the top of Thursday’s trading range. Bullish traders can watch for the stock to break up from the mother bar on higher-than-average volume to indicate the pattern was recognized.
• If Anheuser-Busch trades up toward the $56 mark, the stock will regain the eight-day exponential moving average, which would give bullish traders more confidence going forward. If Anheuser-Busch can break up above the top of the gap, the stock’s current downtrend would be negated.
• Bearish traders want to see Anheuser-Busch continue to trade sideways and then for big bearish volume to come in and drop the stock down under Thursday’s low-of-day, which could accelerate a move to the downside. If that happens, the stock may find at least temporary support at the 0.786 Fibonacci retracement level.
• Anheuser-Busch has resistance above at $55.62 and $57.95 and support below at $52.93 and $51.44.

Read Next: Mark Cuban Vs. Chamath Palihapitiya: Billionaires Battle Over 'Go Woke, Go Broke' Mantra

Photo: Shutterstock