Stock of the day: Procter & Gamble
08 March 2023
On the 19th of January, we were analyzing the situation on the Procter & Gamble and back then, we saw a great bearish setup on the chart. Back then, the price was around 146 USD and his is how we concluded the previous piece:
“Although the second option seemed more appealing, sellers won this battle and managed to break the neckline, closing a day below it. As we said, this is a sell signal and most probably, in the next few days, the price will be going south. As for the target, on the chart, you can see Fibonacci levels and 38,2% is always a good place to start talking about the potential supports. After yesterday’s drop, our view on the P&G is negative.”
This analysis was spot on, the price continued the descent without a hesitation. The price managed to set the local low on the 10th of February and since then, we can observe a small correction. The correction is flat and can be described as a rectangle (black). Currently, PG is flirting with its lower boundary, signaling the possibility of a breakout. How we can trade it? Well, breakout of the lower line of the rectangle will give us a signal to sell, while the breakout of the upper line of this formation will give us a signal to buy.
Since January 19th, the price of Procter & Gamble has continued to decline, confirming our bearish analysis. The price reached a local low on February 10th and has since entered a small correction. Currently, P&G is testing its lower boundary, suggesting a possible breakout. If the price breaks below the lower line of the rectangle, it would indicate a signal to sell. Conversely, a breakout above the upper line of the formation would signal a buy.