In his first "Executive Decision" segment of Mad Money Thursday evening, Jim Cramer spoke with Linda Rendle, CEO of Clorox Co. (CLX) , the consumer packaged goods maker that saw its shares plunge 6.3% despite posting a quarter that included 27% sales growth.
Rendle said that consumers have been changing their behaviors since the pandemic began. Not only are they paying more attention to cleaning and sanitizing, but they're also focused more on health and wellness. All of these trends play into Clorox's long-term strategy.
When asked about vitamins, Rendle said that the vitamin category is an important one for Clorox. It's a small category currently, she said, but there are broad opportunities for growth and the company plans on capitalizing on them.
Clorox continues its long history of innovation, Rendle added. She said brands like Kingsford charcoal have seen a lot of recent innovations and Clorox continues pushing to play a bigger part in people's lives around the world.
Let's fire up the barbie and check out the charts.
We had a positive view of CLX on Jan. 26, saying "Risking to $195, aggressive traders could look to go long CLX on a dip to $205 if available. The $240 area and then the $280 area are our price targets for later in 2021." Prices did not dip to $205 until Feb. 3 and Thursday they broke $195. What changed so fast?
In the daily bar chart of CLX, below, we can see that last month the shares broke a downtrend from August. Prices sprinted higher but then made a fast reversal to the downside. Thursday CLX closed below its November and January lows telling us the downturn since August is continuing. Prices are back below the cresting 200-day moving average line and the flat 50-day moving average line.
Trading volume increased on the recent decline as traders voted with their feet. The On-Balance-Volume (OBV) line has been neutral since July but shows a small rise in January and then the start of a decline. Seems traders became more aggressive buyers and then quickly shifted gears. The Moving Average Convergence Divergence (MACD) oscillator has spent a lot of time since August below the zero line. Weak trend strength.
In this updated weekly bar chart of CLX, below, we can see that the shares briefly traded above the cresting 40-week moving average line. The weekly OBV line shows a decline since August unlike the movement of the daily OBV line. In this time frame traders have been more aggressive sellers for months.
The MACD oscillator is in sell territory below the zero line. It narrowed briefly but did not cross to the upside.
In this daily Point and Figure chart of CLX, below, we can see a weak chart picture. Prices are poised to make a new low for the move down on this percentage scaling. A downside price target of $153 is indicated.
Bottom-line strategy: Sometimes price moves can make your head spin. Bearish for months then bullish for days and now bearish again. CLX may not sink to $153 in the weeks ahead but the charts are bearish for now.