Monday, 10 September 2012

Technical Charts - Procter & Gamble - PG

Time for a technical chart update.  Today we'll look at Procter & Gamble (PG).

As seen below, P&G was relatively stable during the March to May timeframe (though stock market was increasing during this time frame).  It moved in a pretty tight trading range of 65-67 but took a large drop during the Europe financial crisis summer phase as well as poor earnings reports during the summer.  It dropped all the way down to 59, a drop of 12%.  Since then, as a result of activist investor involvement and slightly better earnings results, the stock has rebounded significantly to a yearly high of $68.5, a 16% jump.

While it did plateau a bit at 67 in August, which matched the high end of its trading range from the Spring, last week it strongly bounced off that range on generally positive macro news (i.e. ECB bond buying).  After such a strong run, it is starting to approach the point of being overbought.  Various technical indicators show that while momentum has not yet reversed and its still on an upward move, you should be wary of it retracing some of its advance in the short term.  While overall its still a positive, you should keep a close eye on it if you're looking to do some swing trading.  

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