|
Related Topics
|
Category: Boston Beer Company (SAM) and Technical Analysis
Date: 27 July 2020 Stock price of Boston Beer Company (SAM): $828.34 The stock of Boston Beer Company (SAM) surged by $172.36 or 26.28% on Friday. With no real reason for the surge, the question is where is the support and resistance levels for the stock of Boston Beer Company (SAM).
|
Right now the 10 day moving average is above but very close to the 30 day moving average. Should the 10 day moving average bounce off the 30 day moving average line and stay above it, its a positive sign for Constellation's stock price and upside can be expected "
More About Boston Beer Company (SAM)
The Boston Beer Company, Inc. (“Boston Beer” or the “Company”) is a high-end alcoholic beverage company and one of the largest craft brewers in the United States. In fiscal 2019, Boston Beer sold approximately 5.3 million barrels of its proprietary products. The Company’s brands include Samuel Adams®, Twisted Tea®, Truly Hard Seltzer®, Angry Orchard® Hard Cider, Dogfish Head® Craft Brewery, Wild Leaf® Hard Tea and Tura® Alcoholic Kombucha, as well as other local craft beer brands. Boston Beer produces alcohol beverages including malt beverages (“beers”), hard seltzer and hard cider at Company-owned breweries and its cidery and under contract arrangements at other brewery locations. The four primary Company-owned breweries are focused on production and research and development and include breweries located in Boston, Massachusetts (the “Boston Brewery”), Cincinnati, Ohio (the “Cincinnati Brewery”), Milton, Delaware (the “Milton Brewery”) and Breinigsville, Pennsylvania (the “Pennsylvania Brewery”). These breweries, with the exception of the Pennsylvania Brewery, have tap rooms for retail sales on site. The Company produces a small amount of distilled spirits at the Milton Brewery
Boston Beer Company (SAM) stock price history over the last 5 years
The image below shows the stock price history over the last 5 years. And its been a very good time for Boston Beer Company (SAM) stock holders over the last 5 years. Over the 5 year period the stock price of Boston Beer Company has increased by a massive 277%
Technical analysis of Boston Beer Company
While there are many different technical analysis indicators we tend to follow the principle of keeping things simple. The KIS principle. So we will take a look at the shorter term moving averages and the longer term moving averages as well as the Relative Strength Index (RSI). So let's focus at the longer term moving averages first. The image below shows the stock price of SAM as well as its 50 day and 200 day moving average as well as the RSI for Boston Beer Company
The RSI of SAM is well above 70 which shows the stock is in overbought territory and is due a correction and if the RSI is around 30 it shows a stock is oversold and a spike in the stock price can be expected. As the RSI is well above 70 it shows the stock of SAM is due a correction. But the exact opposite happened, it went and surged to a new all time high. So the question is whether the stock has formed a bubble that is about to burst?
Turning our attention to the moving averages one can see the 50 day moving average is well above the 200 day moving average (which is a positive sign for a company's stock price). If the 50 day moving average crosses below the 200 day moving average it is a negative sign and indicates potential stock declines.
So should SAM stock decline as the RSI is suggesting it will it will find medium and longer term support at the following prices:
The image below is similar to the above expect the moving averages are a lot shorter, however they are interpreted in exactly the same way as the longer term moving averages.
Turning our attention to the moving averages one can see the 50 day moving average is well above the 200 day moving average (which is a positive sign for a company's stock price). If the 50 day moving average crosses below the 200 day moving average it is a negative sign and indicates potential stock declines.
So should SAM stock decline as the RSI is suggesting it will it will find medium and longer term support at the following prices:
- 50 day moving average: $563.96
- 200 day moving average : $429.93
The image below is similar to the above expect the moving averages are a lot shorter, however they are interpreted in exactly the same way as the longer term moving averages.
Right now the 10 day moving average is above but very close to the 30 day moving average. Should the 10 day moving average bounce off the 30 day moving average line and stay above it, its a positive sign for Constellation's stock price and upside can be expected (resistance levels for Constellation Brands will be looked at in the next section of this article).
However should the 10 day moving average fall below the 30 day moving average its a negative sign for Constellation Brands, and downside can be expected.
So let's take a look at the support levels provided by the 10 and 30 day moving average.
So should AMZN stock pull back the first support level will be at $3081.94, its 10 day moving average, after which its 30 day moving average should be seen as the next support level.
However should the 10 day moving average fall below the 30 day moving average its a negative sign for Constellation Brands, and downside can be expected.
So let's take a look at the support levels provided by the 10 and 30 day moving average.
- 10 day moving average: $180.01
- 30 day moving average : $179.35
So should AMZN stock pull back the first support level will be at $3081.94, its 10 day moving average, after which its 30 day moving average should be seen as the next support level.
Support and resistance levels for Boston Beer Company (SAM) stock based on pivot points
Lastly we take a look at the support and resistance levels of Boston Beer Company (SAM) based on pivot points. Pivot points are calculated by taking the average of the high, low and closing price over a particular period selected (in this case a month)
Below a summary of the resistance levels, pivot point and the different support levels for Boston Beer Company (SAM)
So since the stock of Boston Beer Company (SAM) blew past all the resistance levels shown above, in one single day, these are or little value right now. However should the stock of Boston Beer Company (SAM) decline and get to the pivot value of $540.93 and drop below it it will most likely find support at $494.01 and if it falls below that the next support line level is at $451.37 and $404.45. We will be keeping a close eye on the stock price movements of Boston Beer Company as we believe the stock of SAM is totally overvalued and inflated at its current price. Below our last stock valuation on Boston Beer Company following the release of their latest earnings report
- Resistance 3: $673.13
- Resistance 2: $630.49
- Resistance 1: $583.57
- Pivot Point: $540.93
- Support 1: $494.01
- Support 2: $451.37
- Support 3: $404.45
So since the stock of Boston Beer Company (SAM) blew past all the resistance levels shown above, in one single day, these are or little value right now. However should the stock of Boston Beer Company (SAM) decline and get to the pivot value of $540.93 and drop below it it will most likely find support at $494.01 and if it falls below that the next support line level is at $451.37 and $404.45. We will be keeping a close eye on the stock price movements of Boston Beer Company as we believe the stock of SAM is totally overvalued and inflated at its current price. Below our last stock valuation on Boston Beer Company following the release of their latest earnings report
Our latest stock valuation of Boston Beer Company (SAM) as at 24 July 2020
So what do we value Boston Beer Company stock at after the release of their 1st quarter 2020 earnings? Based on Boston Beer Company earnings report our valuation models provides a target (full value) price for Boston Beer Company at $388.90 a stock (up strongly from our 1st quarter 2020 earnings review of Boston Beer Company) . We therefore believe that the stock of Boston Beer Company is overvalued.
We usually suggest that long term and fundamental investors get in at least 10% below our target (full value) price which in this case is $388.90. Therefore we believe a good entry point into Boston Beer Company stock is at $350 or below. We expect the stock of Boston Beer Company to pull back from current levels to levels closer to our target price (full value price) in coming weeks and moths as we believe it is significantly overvalued at this point in time.
We therefore rate Boston Beer Company stock as a sell
We usually suggest that long term and fundamental investors get in at least 10% below our target (full value) price which in this case is $388.90. Therefore we believe a good entry point into Boston Beer Company stock is at $350 or below. We expect the stock of Boston Beer Company to pull back from current levels to levels closer to our target price (full value price) in coming weeks and moths as we believe it is significantly overvalued at this point in time.
We therefore rate Boston Beer Company stock as a sell