The market has been a rollercoaster lately, with volatility dominating headlines.

Concerns around inflation, global economic uncertainty, and sector rotations have left many traders searching for stability and opportunity.

While such conditions can be unsettling, they also create fertile ground for focusing on setups with high potential.

One standout on my radar is Coca-Cola (NYSE: KO), which has been quietly outperforming the broader market.

KO is trading just below its 52-week high of $73.53, up nearly 12% year-to-date—a stark contrast to a volatile market environment that has seen many stocks struggle.

What makes Coca-Cola particularly compelling is its technical setup, which includes a daily squeeze, stacked EMAs, and impressive relative strength.

Let’s break down why this setup could be a winner, especially during times of market uncertainty.

KO Has A Daily Squeeze

A daily squeeze is a technical pattern that signals a period of low volatility and consolidation, like a spring coiling before it releases.

This pattern forms when Bollinger Bands contract inside Keltner Channels, indicating that price action is tightening.

Why is this important?

A squeeze often precedes a significant move, as the buildup of pressure is eventually released in one direction.

In KO’s case, the daily squeeze is taking shape near its 52-week highs—a bullish signal that suggests an upside breakout could be imminent.

This setup is particularly noteworthy given Coca-Cola’s strong fundamentals and its ability to hold up in a volatile market.

When a stock consolidates near its highs and maintains its technical structure, it often indicates that buyers remain in control and are preparing to push prices higher.

Stacked EMAs: A Bullish Signal of Momentum

Another key element of KO’s setup is the stacked exponential moving averages (EMAs) on both its daily and weekly charts. Stacked EMAs occur when shorter-term EMAs (e.g., 8-day, 21-day) are positioned above longer-term EMAs (e.g., 34-day, 55-day).

This alignment is a clear indication of sustained momentum, as it shows that the stock is in a strong uptrend with consistent buying pressure.

In Coca-Cola’s case, the stacked EMAs create a “ladder of support,” where each EMA level acts as a safety net during pullbacks.

What’s even more encouraging is that the weekly chart also shows stacked EMAs, reinforcing the strength of the trend across multiple timeframes. This dual alignment is rare and underscores the bullish sentiment around KO.

Relative Strength: A Key to Outperformance

While the broader market has struggled, KO has been a standout performer, up nearly 12% year-to-date. This relative strength is critical during periods of market uncertainty because it highlights where institutional money is flowing.

Relative strength isn’t just about price performance; it’s a measure of resilience.

Coca-Cola’s ability to outperform in a challenging environment signals strong demand and investor confidence.

In times like these, identifying market leaders is essential, and KO’s consistent gains make it a clear candidate for your watchlist.

Why Coca-Cola Could Thrive in Volatile Markets

While the technical setup is my primary focus, it’s essential to consider the macro and fundamental environment, especially in today’s uncertain market.

Coca-Cola’s strong technicals are further reinforced by a solid fundamental backdrop, making it a standout opportunity during volatile times.

1. Stable Growth Projections: Coca-Cola is forecasting 5%-6% organic revenue growth and 8%-10% EPS growth for 2025. This steady outlook provides a sense of safety for investors amid uncertainty.
2. Consumer Staples Resilience: As a leading player in the consumer staples sector, Coca-Cola benefits from consistent demand for its products, even during economic downturns. This makes it a defensive play in volatile markets.
3. Hedge Against Inflation: With inflationary pressures easing, Coca-Cola’s pricing power positions it well to maintain profitability while benefiting from lower input costs.

Your Action Plan

While I don’t currently have a position in KO, it’s firmly on my watchlist. The combination of a daily squeeze, stacked EMAs, and strong relative strength makes this a high-probability setup worth tracking.

If the daily squeeze “fires” to the upside, we could see KO break out and continue its steady climb higher.

In a market dominated by uncertainty, Coca-Cola’s technical and fundamental strength make it a standout opportunity.

And if you’re looking to target explosive trades like this one but with even faster results, I recommend checking out my Opening Bell Aftershocks strategy.

This approach identifies high-probability setups that can deliver massive gains just minutes after the market opens.

Click here to learn how to start trading Opening Bell Aftershocks today.