To The Moon

The US equity markets have endured a rollercoaster ride over the past 14 days, marked by (a) sharp technical corrections and (b) a historic rebound.

Volatility culminated in a dramatic "V-shaped" recovery during the first week of February 2026. (see below)

By the time first trading week of February 2026 ended:

The Dow:

• Rose by +2.74% (+1,337.90 to 50,115.67) and it crossed the 50,000 mark for the first time.

• This psychological milestone was reached late Friday, as blue-chip giants surged to offset earlier weekly losses, signaling a rotation toward "Old Economy" stability.

S&P 500:

• Rose by +0.23% (+15.66 to 6,932.30).

• Strong earnings from Tech & Energy helped bolster investor confidence in growth-oriented stocks, boosting the overall index sentiment.

• However, the index remained under pressure for much of the week, with nearly $1 trillion in market capitalization wiped out before the Friday rally.

Nasdaq:

• Continued to fall by -1.45% (-339.33 to 23,031.21).

• Worst index performer of the week, comparatively speaking.

Catalysts that caused Market Jitteriness

4 key factors contributed to recent "risk-off" environment:

Incoming Fed Chair a Hawkman ?

• On Fri, 30 Jan 2026, Trump announced (via Truth Social propaganda machine) that Kevin Warsh will succeed Jerome Powell as Fed Chair.

• The nomination initially sent gold prices into a tailspin and caused a spike in Treasury yields. Warsh’s reputation as an inflation "hawk" stems from his past criticism of quantitative easing.

• Investors fear fewer interest rate cuts in 2026 and a more aggressive stance on inflation.

• However, some analysts now suggest Warsh may be more nuanced, potentially supporting rate cuts if productivity gains, driven by AI is able to keep inflation in check.

Big Tech Capital Expenditure Fears:

• $Microsoft(MSFT)$ and $Amazon.com(AMZN)$ high -profile earnings reports out on 28 Jan 2026 & 05 Feb 2026 respectively raised red flags.

• Collectively, the "Magnificent Seven" are now signaling a staggering $650 billion in CapEx for 2026, a +60% YoY increase from 2025.

• While AI demand remains high, the 2 giants’ massive increases in capital expenditure (CapEx) forecasts—stoked fears that the payoff for these investments is too far in the future.

• AMZN’s $200 billion pledge, that includes a massive expansion into robotics and low-Earth orbit satellites (Project Kuiper), led to a -9% single-day drop in its share price as markets questioned cash flow discipline.

Geopolitical and Trade Policy Shocks:

• Markets reacted poorly to a "partial” government shutdown that began in late January 2026 and escalating tensions in the Middle East, against Iran.

• Internal unrest in Iran has further complicated the energy landscape, leading to spikes in oil price volatility.

• Additionally, renewed tariff threats from the Trump administration against Canada, Europe, and South Korea introduced significant policy uncertainty.

• Specifically, a 100% tariff threat against Canada over its trade ties with China and a 10% levy on European partners over the "Greenland dispute" have kept multinational corporations on high alert

The "Shadow" Liquidity Squeeze:

• Extreme volatility in "speculative" havens like Gold (that crashed from above $5,600) and Bitcoin which plummeted from $90,000 to $70,000 in just 2 weeks, triggered a broader deleveraging event.

• This "crypto-to-equity" contagion forced margin calls across global portfolios, drying up liquidity in high-beta tech names.

Consider Coca Cola ?

Given the intense volatility that has recently shaken high-growth tech valuations and speculative assets, perhaps now is the time, to re-look and re-consider $Coca-Cola(KO)$, at the eve of its Q4 earnings due on Tue, 10 Feb 2026.

Afterall, it has consistently demonstrated its classic "safe haven" appeal, with KO climbing for seven consecutive sessions to hit an all-time high of $79.03 as of Fri, 6 Feb 2026 closing.

Why Coca Cola ?

After reviewing below details regarding Coca-Cola’s business foundation > financial strength > market performance > cash & income stability > (finally) future growth catalysts, reader could understand why KO is a valuable, long-term investment.

Global Dominance & Scale:

• KO operates a truly massive, multi-regional footprint.

• It has operations in (1) North America, (2) Latin America, (3) Europe, Middle East & Africa (EMEA), and (4) Asia Pacific.

• The company commands over 40% of the global non-alcoholic beverage market, with a portfolio of over 500 brands.

• ensuring that its revenue is diversified across global geographies.

Earnings Resilience:

• Analysts are forecasting a steady "beat and raise" scenario, with expected Q4 earnings of $0.56–$0.57 per share on revenues of $12.05 billion (that’s a +4.4% YoY gain).

• Historically, KO has beaten EPS estimates in 9 of the last 10 quarters, showing remarkable consistency in varied economic climates.

Defensive Outperformance:

• During recent "risk-off" period, KO outperformed S&P 500 by over +10%.

• It benefitted from a sector rotation away from high-Capex AI plays and into reliable consumer staples.

• This company successfully maintains a "recession-proof" profile, with beverage sales that historically hold steady regardless of whether the economy is thriving or consumers are tightening their belts.

Exceptional Cash Generation:

• The business model is a "cash cow".

• With an operating margin exceeding 31%, the company generates significant free cash flow even after heavy marketing investments, fund its reliable dividend increases and support its ongoing leadership in evolving markets.

Dividend Support:

• With a forward dividend yield of approximately 2.6% – 2.7%, KO offers a tangible income floor that tech giants currently lack, providing a "buffer" against potential Fed-driven turbulence.

• It has a track record of 62 consecutive years of dividend increases, making it a "dividend king", having returned $8.4 billion to shareholders in 2024 and nearly $100 billion since 2010.

• It’s 2026 yield of over 2.6% offers a tangible "floor" for the stock.

Value Unlocking:

• Strategic moves, such as the rumored $1 billion IPO of its Indian bottling unit (HCCB), that could value the division at nearly $10 billion, suggest the conglomerate is actively surfacing shareholder value.

Quarterly Earnings - Q3 Actuals & Q4 Forecast.

On the eve of its of upcoming earnings release, a review of the previous quarter’s financial performance is appropriate to provide necessary context.

Q3 2025.

• Revenues: Net revenues grew +5% to $12.5 billion

• Earnings per share (EPS GAAP): grew +30% to $0.86 and included the impact of a 4-point currency headwind.

• Earnings per share (EPS Non-GAAP): grew +6% to $0.82 and included the impact of a 6-point currency headwind.

• Operating margin: was 32.0%, and comparable operating margin (non-GAAP) was 31.9%.

• Cash flow: Year-to-date cash flow from operations and free cash flow (non-GAAP) were $3.7 billion and $2.4 billion respectively.

Q4 2025 Forecast.

• Revenue: forecast to come in at $12.05 billion. It will be up 4.4-5.7% YoY from Q4 2024’s $11.4 billion.

• Earnings per share (EPS Non-GAAP): consensus points to comparable $0.56-$0.57. It will be up +3.6% YoY from Q4 2024’s $0.55.

Room To Zoom ?

On Friday, KO closed at $79.03, just pennies away from its 52-week high of $79.20.

While this clearly shows strong momentum, as a potential investor, I am curious if the stock price can climb higher or if it has reached a temporary peak / plateau?

Technical analysis may provide the answer to my question. Let’s see !

Simple Moving Averages (SMA).

KO’s 06 Feb 2026 closing price ($79.03) is trading above its Simple moving averages (SMA) of:

• 20-day ($72.90).

• 50-day ($71.37).

• 200-day ($70.09).

It signals a bullish technical setup across timeframes.

With KO’s 50-day SMA crossing its 200-day SMA since mid-December 2025, KO "golden cross" pattern should see continued rallies if trading volume remains high at approx. 25 - 30 million shares /day)

MACD.

MACD is exhibiting strong and accelerating short-term momentum:

• The MACD line (12, 26) at 1.80, is well above the Signal Line of 1.15.

• Both indicators remain comfortably above the Zero line.

• This reflects a powerful underlying uptrend and significant financial strength in KO's current trajectory.

• The price is experiencing a breakout, characterized by expanding momentum.

• The “positive” divergence (0.64) indicates that upward momentum is actively strengthening rather than slowing down.

In short, long-term trend remains positive and latest TA reading suggests that buying pressure is intensifying, signaling a potential rally continuation toward new highs — as long as the stock maintains its market performance.

RSI.

• KO’s latest RSI (14) came in at 80.70, indicating it is in “overbought” territory.

• A move above 80 is relatively rare for a stable staple like KO.

• It shows buyers have been extremely aggressive, likely driven by market performance and "golden cross"

My viewpoints: (mine only)

For week beginning 9 Feb 2026, it will be fairly realistic to expect short-term volatility leading to a consolidation or mean reversion.

Most Likely Scenario (Consolidation):

• KO may trade sideways between $77.50 (support) and $79.50 (resistant).

• This allows RSI to fall (back) towards 60–70 while stock price remains relatively flat.

• This will be the healthiest outcome for a long-term rally.

"Pullback" Target:

• If a correction occurs, the first major "floor" is the 20-day SMA (currently around $72.90.

• A dip to this level would be considered a "buy the dip" opportunity rather than a crash, as it would align with the stock's cash & income stability.

There is a slim and remote possibility of a third scenario - the Upside Catalyst.

• If KO breaks and holds above $80.00 with high volume, it enters "blue sky territory".

• With no historical resistance data to fall back on, KO could potentially reaching analyst targets of $82.00 - $88.00.

• Success depends heavily on KO's ability to maintain "pricing power" without sacrificing sales volume.

This scenario could happen if the following conditions are aligned:

• KO’s Q4 2025 earnings exceeds market expectations.

• More importantly, KO’s Q1 2026 and FY 2026 outlook & guidance are ‘bullish”.

• Overall US market sentiments are positive.

• Minimal geopolitical disturbances.

Parting Notes.

Perhaps the strongest conviction that Coca cola is investment-worthy comes from $Berkshire Hathaway(BRK.B)$.

• It remains as Berkshire’s 4th largest publicly traded holding, representing approximately 10.96% of the total portfolio value.  

• From Coca cola’s perspective, Berkshire’s holdings represent 9.82% of company’s outstanding stock.

The stake consists of a fixed 400 million shares, that costed investor $1.32 billion.

With current value at approx. $31.5 billion, it nets investor a gain of 2,330%.

Berkshire Hathaway earns approx. $204 million every quarter, totaling $816 million annually, just from its Coca-Cola dividends.

Multiply by the years it has held onto KO, you get the picture.

It is a position Mr Buffett has held without selling a single share for decades.

Fun Facts.

The first Coca-Cola trade transacted in Q4 1998 (27 years ago).

Since then, Mr Buffett bought KO shares 10 more times and sold on 9 occasions, with the last transaction in Q3 2012 (13 years ago). (see above)

After all that has been said and done, are you convinced that Coca cola is a “buy” and for the long term ?

Remember to check out my other posts. (See below). Help to Repost ok, Thanks.

Must Read: Click on below titles to access. Repost to share, Like as encouragement ok. Thanks.

• Fall of Magnificent 7, Rise of AI abilities ! Really ?

• SoFi - Strong Q4 is a BUY despite pullback now.

• INTC - Return of the Titan in 2026 / 2027 ?

• Do you think Coca cola will hand in a stellar set of Q4 numbers ’?

• Do you think Coca cola is a worthy investment like Warren Buffett ?

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