Shares of Kimberly-Clark (KMB) have been a strong performer on the upside over the past 12 months, but some subtle technical clues suggest that longs should tighten their protective sell stops.
It's easy to see in this chart, above, of KMB that prices had a pretty good rally from the August/September low. KMB is above the rising 50-day and 200-day simple moving averages. But -- here it comes -- KMB made higher price highs in December, January and into February while the On-Balance-Volume (OBV) line has not made new highs to confirm the price highs.
Chartists like to see volume expand in the direction of the trend and the late Joe Granville would have liked to see new highs on the OBV line to confirm the advance. In the lower panel is the momentum study, and it too does not confirm the new price highs with lower highs in October through February.
The rate of change of price gains slowed as prices rose. A slower pace of gains tends to foreshadow a reversal. It is not a direct link, but rather it is like the amber light at an intersection -- it is a heads-up that the red light is probably next.
This longer-term chart of KMB, above, is mostly friendly. Prices are firmly above the rising 40-week moving average. The OBV line is rising on this timeframe vs. a sideways trend on the daily chart.
Finally, momentum is slowing on a weekly timeframe, too. The trend is up, but the rate of advance is slowing. Watch KMB closer and bring your sell stop up to just under the 50-day moving average.