Over the past several months, Kraft Heinz Company (KHC) has continued to fade, with price action trending lower since July and the stock now down more than 18% from its July highs. This pullback has occurred despite the company posting decent earnings and continuing to pay a dividend, which makes the recent price behavior especially noteworthy from a technicals standpoint. When a stock drifts lower even as fundamentals remain steady, I pay very close attention to the structure forming on the chart.
From a technical perspective, there is a very clear trendline that I am currently watching on KHC. This trendline is drawn from the pivot high on July 30 through the pivot high on November 26, creating a well-defined downsloping resistance line. These two pivots establish a clean technical reference point, and price respecting this level over time gives the trendline added significance. In my experience, well-respected trendlines like this often act as decision points for the next meaningful move.
What makes this setup particularly interesting is the bullish implication of a break above this downsloping trendline. A decisive move through this level would represent a shift in character, signaling that sellers who have controlled the stock since July may be losing control. From a technicals perspective, this type of trendline break can often act as the catalyst for a larger breakout move, especially when the trendline has been tested multiple times.
In terms of execution, there are two primary ways I would look to trade this setup. The first is entering long on a clean break above the trendline itself. The second approach is to wait for a break, followed by a retrace back to the trendline, and then look for confirmation before entering. Both methods allow traders to participate in a potential upside move while still anchoring decisions around clearly defined technical levels.
For those less familiar with KHC, Kraft Heinz Company is a major food company that has remained in focus for many market participants due to its earnings performance and dividend. Even so, price action ultimately tells the story, and right now the chart is where my attention remains. I always let the technicals guide my bias, especially when a stock is approaching a key inflection point like this.
As always, regardless of how compelling a setup may appear, proper risk management is essential. Clearly defining risk, position size, and invalidation levels is a non-negotiable part of my process when trading stocks.
Source: https://www.fxstreet.com/news/the-key-trendline-to-watch-on-kraft-heinz-company-202601061458
