Kimberly-Clark Is Ready to Resume Its Long-Term Uptrend

 | Feb 10, 2017 | 8:51 AM EST
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Kimberly-Clark (KMB) made a four-month correction last year that challenged its long-term uptrend from the 2009 nadir, but it is now ready to move higher with stronger volume and bullish technical indicators.

In this 10-year weekly chart of KMB, below, you can see the major uptrend from the 2009 bottom. Like physics 101, a trend in motion tends to remain in motion. Let's take a closer look at the decline last year.

In this one-year daily bar chart of KMB, below, you can see a double-top formation around $138 with highs in April and early July. The downtrend got in full gear over the summer months with the low reached in November. Can you see how the volume of trading became heavier from late October?

Now look at the On-Balance-Volume (OBV) line which based in November and December and turned up strongly in January. KMB responded on the upside last month by closing above the 50-day moving average line and making a breakaway gap with strong volume. KMB closed on the declining 200-day moving average line yesterday.

The trend-following Moving Average Convergence Divergence (MACD) oscillator in the lower panel gave a cover shorts buy signal in early November and crossed the zero line last month for an outright go long signal.

In this three-year weekly chart of KMB, below, we can see that prices have rallied back to the 40-week moving average line. KMB could close above the line today. We'll see.

The OBV line on a weekly timeframe has been rising the past three months and confirms the price advance. The weekly MACD oscillator gave a cover shorts buy signal last month.

Bottom line: KMB looks good on several timeframes. Look to buy KMB near $122 if possible or on a close above $126. I would not want to see KMB close below $119.

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