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  1. Home
  2. / Investing

Procter & Gamble Is Leading a New Bull Market in Hygiene

I'd continue to hold longs from previous recommendations.
By BRUCE KAMICH
Oct 21, 2020 | 09:19 AM EDT
Stocks quotes in this article: PG, RBGPF

There's always a bull market somewhere, Jim Cramer tells viewers of Mad Money at the conclusion of every show. Tuesday night he highlighted a new bull market: hygiene. After listening to the conference call at Procter & Gamble (PG) and its overseas rival Reckitt Benckiser (RBGPF) , Cramer said one thing is clear, people are obsessed with personal hygiene.

As Procter's management noted, hygiene is the foundation for a healthy lifestyle and once good habits are established, they are rarely reversed.

That's why sales are strong for Proctor's brands like Tide, Bounty, Dawn and Febreze. The same sentiments were shared by Benckiser, makers of Lysol, Vanish and AirWick, among others.

Let's review the charts of PG. We last reviewed the charts on September 2 and wrote that "The charts and indicators of PG suggest that prices could stall or trade sideways for a period of time. The weekly Point and Figure chart, which ignores time (and volume), suggests we can eventually see gains to the $180 area. Stay long and raise sell stops to a close below $128."

In this daily bar chart of PG, below, we can see that prices did not fall below $135 so traders should be still long PG with their stops below $128. PG has rallied into October and is trading above the rising 50-day moving average line and the rising 200-day moving average line.

The On-Balance-Volume (OBV) line made a slight new high this month but has since turned flat suggesting some profit taking.

The Moving Average Convergence Divergence (MACD) oscillator is above the zero line but poised for a possible cross to the downside - not the strongest pattern.  

 
In this weekly bar chart of PG, below, we can see that price gains have rewarded shareholders handsomely the past three years. PG is trading above the rising 40-week moving average line.
 
The weekly OBV line has kept up with the rally to new highs as this indicator has made its own new high.
 
The MACD oscillator has narrowed in recent weeks but remains in a bullish alignment above the zero line. 
 
 
In this daily Point and Figure chart of PG, below, we can see that prices have reached and exceeded a price target around $135. Some technically oriented traders may have taken some profits.  
 
 
 
In this weekly Point and Figure chart of PG, below, we can see that the charting software is projecting a longer-term price target of $180 which we showed in our last review of PG. 
 
 
Bottom line strategy: Continue to hold longs from previous recommendations. Raise stop protection to a close below $135. The $180 area is our next price objective.
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TAGS: Investing | Stocks | Technical Analysis | Trading | Household Products | Personal Products

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