Colgate-Palmolive (CL) briefing made new highs for the move up in January and this month it has briefly broken its November lows. Have traders and investors just been whipsawed or have we set the stage for another rally? Let's review the charts and indicators to see if we can plot the course for the weeks ahead.
In this daily bar chart of CL, below, we can we can see a sideways or neutral trading range since last February. Prices recently broke below the lows of late October but it does not look like this is the start of a sustained move lower, in my opinion. Prices are below the declining 50-day and 200-day moving average lines. The daily On-Balance-Volume (OBV) line peaked back in June and has been in a downtrend, however, the OBV line did not make a new low with the price action last week. The Moving Average Convergence Divergence (MACD) oscillator is below the zero line or in bearish territory but it looks like the two moving averages that make up this indicator have started to narrow towards a cover shorts buy signal.
In this weekly bar chart of CL, below, we can see that prices are below the flat to declining 40-week moving average line. The weekly OBV line has been in an up and down pattern since last March but it has not made a new low to confirm the recent new low in price. The weekly MACD oscillator just crossed to the downside for a take profits sell signal.
In this Point and Figure chart of CL, below, we can see a triple bottom at $68.77. A trade down to $68.09 would be bearish but right now the chart shows and upside price target of $94.62.
Bottom line -- the divergences between the price action and the OBV line are subtle but they suggest that CL has more upside than downside risk at this moment. Aggressive traders could probe the long side risking a close below $68.