Colgate-Palmolive Is Ready for a Big Upside Breakout

Will earnings be the catalyst?

Colgate-Palmolive (CL) is an iconic brand. The shares have been rallying up to the $70-$75+ area several times over the past five years but have been unable to break through. Earnings are due this Friday. Maybe they will be the "charm" for an upside breakout.

Let's check out the charts and indicators of this Action Alerts PLUS holding. 

In the daily bar chart of CL, below, we can see that the shares are trading above the rising 50-day moving average line. The 200-day moving average line is below the price action and the slope has slowly turned positive this month.

The trading volume was heavy in March but has still remained active. The On-Balance-Volume (OBV) line shows a rise from late March telling us that buyers of CL have been more aggressive.

The trend-following Moving Average Convergence Divergence (MACD) oscillator has stayed above the zero line since the middle of April and could turn upwards soon for a fresh outright buy signal. 

 

 

In the weekly bar chart of CL, below, we went back five years to show the number of times that prices have been turned back in the $74-$78 area. Prices are above the rising 40-week moving average line.

 

The weekly OBV line has been in an uptrend from the middle of 2018 and has made new all-time highs. The OBV line can be a leading indicator at times and this could be one of those times as the line suggests CL can make new all-time highs. The MACD oscillator is bullish on this time frame. 

 

 

In the daily Point and Figure chart of CL, below, we can see that a trade at $76.72 will be an upside breakout and refresh the uptrend. A price target in the $83-$84 area is being projected. 

 

In this weekly Point and Figure chart of CL, below, we used weekly close-only price data. Here we can see a potential price target in the $93 area.

 

 

 

Bottom-line strategy: I have no special knowledge of what CL is going to report on Friday, but the charts at this point in time are bullish. Aggressive traders could go long CL at current levels risking a close below $71 for now. Our price targets are $84 and then $93 and maybe higher.

(Colgate-Palmolive is a holding in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells CL? Learn more now.)

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