In his first Executive Decision segment of "Mad Money" Friday, Jim Cramer spoke with Benno Dorer, chairman and CEO of Clorox Co. (CLX) , the disinfectant maker that posted a strong quarterly earnings beat and raised itsr full-year guidance.
Dorer said Clorox had a great quarter that was delivered in the right way. Despite unprecedented demand, the company did not raise prices and prioritized making products that are on the front lines of battling Covid-19.
When asked about demand, Dorer admitted that this is uncharted territory as disinfectant demand surged 500%. Clorox was able to increase its output by 40%, however, and the company is making investments in capacity expansion.
Let's check the charts to see if investors have been demanding the stock of Clorox, which is a holding of Cramer's Action Alerts PLUS charitable trust.
In this daily bar chart of CLX, below, we can see that prices turned higher way back in November. Prices experienced some wild swings up and down in March but managed to continue the uptrend. CLX is above the rising 50-day moving average line and the rising 200-day moving average line. Trading volume has been very active since late February and the daily On-Balance-Volume (OBV) line has been in an uptrend from November, telling us that buyers of CLX have been more aggressive. The Moving Average Convergence Divergence (MACD) oscillator has been above the zero line since December but currently is pointed down in a take profits mode.
In this weekly bar chart of CLX, below, we can see the price activity of the past three years. There is a long consolidation pattern around the $160 area and that can support a rally to the $320 area, or double from this base pattern. Prices are in an uptrend and above the rising 40-week moving average line -- a rare occurrence this year. The weekly OBV line has made a new high for the move up to confirm the price gains. The weekly MACD oscillator is very bullish.
In this first Point and Figure chart of CLX, below, we used daily price data and we can see that a minor downside price target of $166 is projected. We also can see that a trade at $199.42 will be a triple top breakout and turn this chart bullish.
In this second Point and Figure chart of CLX, below, we used weekly price data. Here the chart projects a potential price target in the $348 area. A weekly trade at $213.80 will refresh the uptrend.
Bottom line strategy: Maintain long positions and raise sell stop protection to a close below $179 now. Our next price targets are $215, $250 and $300.