Look to buy Monster Beverage on a retracement as it breaks key resistance

Monster Beverage Corporation (NASDAQ:MNST) stock rose past a key resistance of $88 on Friday. On Monday, the stock accelerated gains in premarket before retreating slightly.

In its May 5 financial report, revenue rose to $1.52 billion in the first quarter. The revenue was higher than estimates of $1.43 billion. However, the diluted earnings per share were $0.55, lower than $0.59 in the prior year. The earnings also missed expectations of $0.61 per share. The stock has been surging since then.

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On Wall Street, Monster Energy has been rated a buy by 24 analysts. The rating has held since April, which has coincided with strong stock gains. The analysts have a price target of $100, which represents a 12% upside potential from the current $89. The consensus low estimate is $88, which implies that the stock has already surpassed the local bottom price.

Besides, despite the mixed earnings, Monster remains on a bull run. The stock is up 7.87% in the month and is poised for further gains after breaking above the $88 level.

Monster breaks above $88 support

Source – TradingView

Technically, Monster Beverages has traded past a key resistance at $88, which could become a new support. The stock is retreating after facing resistance close to $90. The established resistance is at $93. The stock could reverse slightly to the support before continuing up to $93. If the current momentum is sustained, the stock could continue higher, up to $97. However, our first target will be $93.

Concluding thoughts

Investors should buy Monster after it finishes the current retracement once it settles at or close to $88. The key target is at $93, but the stock could rise up to $97.

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