Coca-Cola Not Far from 52-Week High

Coke being near a 52-week high may not be a great signal for the markets. It's possible that participants are hiding in it, trying to avoid what they perceive will be a near-term future of volatility. Overall, it could be a wise choice. Considering the stock's dividend yield, a trader might be afforded some downside protection, although, as I always say, there's really no such thing as a truly defensive equity if things become absolutely awful. Anything and everything can take a hit if the bears growl loudly enough.

The beverage giant's recent run began back in July. Although I don't think there's anything wrong with adding to a long-term position even at these prices, let me today examine the shares from a more technical perspective. Coke is bound to hit resistance at the $60 level, and it may decide to retreat once again. If you're not going to hold the company for years as a core investment instrument, it's something you may want to take into account.

So, count me as someone who believes the shares may be a bit high at the moment. If they break convincingly through the $60 mark, then I might have to reassess my thesis. For now, though, I'd be waiting for a pullback of at least a few bucks. Hey, I have no problem with buying at this dividend yield, but if one can buy lower, then that's not so bad, either.

Disclosure: I own Coke; positions can change without notice.