Clorox's Stock Chart Still Looks Clogged

 | May 01, 2018 | 11:44 AM EDT
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Clorox Co. (CLX) was reviewed in late March, where I commented that, "I have no idea what longer-term investors anticipate about the fundamentals but I can say that the charts of CLX look weak and traders and investors should be prepared for further declines in the months ahead."

Looking back over the last five weeks of activity we can see (first chart below) that price bounced briefly at the end of March toward the underside of the declining 200-day line. Prices failed and by the middle of April they had fallen to new lows. With prices down significantly from their December zenith what might we expect next?

In this updated daily bar chart of CLX, below, we can see that prices bounced last week after a sharp two-day decline. The slopes of both the 50-day average line and the longer 200-day moving average are negative or bearish. The daily On-Balance-Volume (OBV) line peaked in late December and is still pointed down signaling more aggressive sellers.

The trend-following Moving Average Convergence Divergence (MACD) oscillator was narrowing toward a possible cover shorts buy signal but that may be postponed if prices continue to decline.

In this weekly bar chart of CLX, below, we can see that prices are holding just above the lows of November 2016. Prices did not spend a lot of time below $115 back in November so the area is not considered key or major support. CLX is still trading below the declining 40-week moving average line. The weekly OBV line is trending down and the weekly MACD oscillator is still in a bearish configuration well below the zero line.

In this Point and Figure chart of CLX, below, we can see a bearish price target being projected to the $96-$95 area or off the bottom of this chart.

Bottom line: I don't know what traders and investors are anticipating for the numbers for CLX Wednesday morning, but the charts are still bearish. There is chart resistance above the market in the $124-$133 area if prices rally and limited old support below $115. I would take a neutral to bearish stance on CLX at this juncture.

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