This is a daily chart of AB Inbev. The chart is in Heikin Ashi candlesticks, which is ideally suited to spot trends and reversal. The Belgian-founded beer brewer has gained a lot recently. On the chart, I overlayed the USD index. We can see the two series display positive comovement.
Moving to the 4-hour chart, we can see that a divergence in the price action of AB Inbev and the USD Index around the 6th of January led to a significant upward move. The anticipation of European QE certainly helped. Around the end of February the stock broke above the 112-level to reach all-time highs above 118 last Friday.
The 30-minute chart shows this weeks' divergence even better. We also note the retracement to the 112 level. The 112 level coincides with the 62% retracement of the rally since 26th of February.
We believe this point provides a great entry point for a high probability trade. If the stock bounces off the 112 level we have a target of 118. The risk for this trade could potentially be limited to a stop loss at around 111.50. If the European markets start moving back up after two days of volatile trading, we could see AB Inbev move back towards all-time highs.
We are long AB Inbev
Disclosure: The author is long BUD.