AB InBev (BUD) stock price pattern points to big moves ahead

AB InBev (NYSE: BUD) stock price has crawled back after bottoming at $53 in May. It has risen by more than 8% to the current $57.54. This price is ~13.5% below the highest point this year, meaning it is still in a deep correction.

Bud Light concerns easing?

AB InBev, one of the leading alcoholic beverage companies in the world, came under intense scrutiny a few months ago. As I wrote here, the company was criticised by liberals and conservatives alike.

Conservatives blamed the company for sponsoring Dylan Mulvaney, a transgender youth. Liberals, on the other hand, blamed it for not supporting Mulvaney enough. As a result, Bud Light, its flagship brand, has lost its market share in the US. It has been overtaken by brands from Molson Coors and Constellation Brands.

From the onset of the crisis, I argued that the boycott would be short-lived and that AB InBev will survive. For one, history suggests that social media boycotts rarely work in the long term. For example, Trump called for followers to boycott Apple a few years ago.

Similarly, social media users boycotted Twitter after Elon Musk’s purchase and Facebook after the Cambridge Analytica scandal. All these companies have thrived since then.

There are signs that Bud Light’s boycott is easing. Data by Nielsen showed that AB InBev’s beer sales dropped by 10.8% in the latest four weeks even as beer sales rose by 2.1%. This drop was smaller than in the previous session. Also, AB InBev is still the market leader in beer with a share of 38.9%.

Most importantly, while the US is an important market, AB InBev has a global presence. It has a strong presence in South America, EMEA, and APAC region. As such, this diversification will help it weather the temporary setback in the US.

To be clear. AB InBev is facing significant challenges, especially in Argentina, where the local currency has crashed.

BUD stock price analysis

BUD chart by TradingView

The daily chart shows that the AB InBev share price has moved sideways in the past few months. Along the way, the stock has formed a symmetrical triangle pattern shown in red. This triangle is nearing the confluence level, meaning that it will make some moves in the coming weeks.

BUD share price has moved slightly above the 50-day moving average and is a few points below the 38.2% Fibonacci Retracement level. Therefore, at this stage, the outlook for the shares is neutral as it nears the triangle’s confluence level. The key support and resistance levels to watch will be at $54 and $61.15.