Boring Is Beautiful

 | Apr 16, 2014 | 12:28 PM EDT  | Comments
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Stock quotes in this article:

bac

,

cl

,

clx

,

kmb

,

pep

Sometimes, boring is beautiful.

Look, this market is just not going to give you anything easy right now. I will say today is very different than the last several days. Trend has been replaced with chop. Probably a better day to eat a sandwich and watch the goings on than get chopped up trading or scalping.

Bank of America (BAC) brought me nothing. Just a flat trade on results that were less than robust. I have to say I am a bit surprised, but that's the nature of earnings. It is also why I approached the trade in the manner I did. A straight up bullish trade would have been painful. Even losing a few pennies here is much better. I originally intended to keep the position, but I have more questions than answers at this point, so escaping with just some hurt pride looks like a win to me.

I think boring is beautiful here. Lay out the charts of Colgate-Palmolive (CL), Clorox (CLX), Kimberly-Clark (KMB) and PepsiCo (PEP) and you'll actually see one commonality: they are all bullish. What I find most attractive from these current four horsemen of the consumer goods is they all have slightly different price patterns. I love that they aren't trading exactly the same. It makes me feel better about the approach of buying all four rather than just one or four acting like one.

CL was already pushing one supporting trendline higher and is now riding a second (the dotted blue line). There is support at $66.50, then very strong support at $65. If I were selling bullish put spreads, I would likely look at some slightly-longer-dated $65-62.50 types of spreads.

 

Colgate-Palmolive (CL)
Source: StockCharts.com

 

CLX is just breaking out. It is where CL was a week ago. I fully expect $92.50 here. A close over $90.50 deserves a long hard look at a long position. Unfortunately, this really isn't an ascending triangle per se, due to the large white area between price and resistance while the stock is rising.

 

Clorox (CLX)
Source: StockCharts.com

 

KMB is just a nice bullish channel. Buy $110 or a break over $113 and look to take some profits near $113. Right now it is in the middle, so probably more of a watch than an immediate buy, but certainly one I don't want to be short right now.

 

Kimberly-Clark (KMB)
Source: StockCharts.com

 

PEP might be jumping on the heels of Coca-Cola (KO), but so what? It is above its short-term bullish channel and breaking out from a much broader inverse-head-and-shoulders pattern. Price target here is $90 with a stop on a close under $81.90. A very solid risk reward on very strong momentum.

 

PepsiCo (PEP)
Source: StockCharts.com

 

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