The reason for the current downside action is that the company is being targetted by a lawsuit alleging that they lied about the materials used in their drinks. Management has come out and stated that the alleged claims are without merit
LaCroix has denied claims in a class-action lawsuit that its sparkling water, billed as “innocent” and “100 per cent natural,” contains an ingredient used in cockroach insecticide.
LaCroix denied the allegations on social media, writing that the flavors in its products are “derived from the natural essence oils from the named fruit used in each of the flavors.”
“All essences contained in LaCroix are certified by our suppliers to be 100% natural,” the company added. Full Story
So, unless company officials are lying through their teeth, the current pullback should prove to be a buying opportunity; our indicators are trading either in the oversold to insanely oversold ranges. The RSI is trending upwards so the downside should be limited from here, and the MACD’s are close to experiencing a bullish crossover
Technical Analysis Outlook
The pattern on the charts still looks strong, so from a technical analysis point, this current pullback could prove to be a buying opportunity
There is a relatively strong zone of support in the 88-90 ranges. A weekly close below this level could then take it as low as 65.00, a zone that offers a much stronger level of support. At this level, it would make for a very good buy and if it happens to test the main uptrend line it would become a screaming buy.
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