CL has since gotten its groove back and shares are up 11% so far in 2020. When the company reported two weeks ago, sales were up 5.5% with healthy margin expansion and guidance for 3% to 5% growth in 2020. Cramer said when the market has bad days, CL is a stock you want to buy.
Let's check out the charts of CL.
In the daily bar chart of CL, below, we can see that prices gapped higher at the end of January. CL is trading above the rising 50-day moving average line and the rising 200-day moving average line. The 50-day line has turned up quickly and is poised to move above the 200-day line in what will probably become a bullish golden cross.
The daily On-Balance-Volume (OBV) line shows a strong rise from September telling us that buyers of CL have been more aggressive. The Moving Average Convergence Divergence (MACD) oscillator is above the zero line in bullish territory but has narrowed a bit in recent days suggesting that the strength of the advance is waning.
In the weekly bar chart of CL, below, we went back five years to show the number of times that prices have failed or stalled in the $76-$78 area. Prices are currently above the rising 40-week moving average line.
The weekly OBV line has been very strong in recent months and is close to making a new high. The MACD oscillator has turned upward to a fresh outright go long signal as the indicator is crossing the zero line.
In this Point and Figure chart of CL, below, we can see the recent price strength without a gap. Here the chart shows a potential upside price target of $92.
Bottom-line strategy: CL could trade sideways for a little while as broader market weakness may spill over. Once this period of consolidation is done we look for renewed gains to the $92 area. Trade CL from the long side.