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Kimberly-Clark Corporation engages in manufacturing and marketing health care products worldwide. The company operates in four segments: Personal Care, Consumer Tissue, K-C Professional and Other, and Health Care. The Personal Care segment manufactures and markets disposable diapers, training and youth pants, swimpants, baby wipes, feminine and incontinence care products, and related products under the various brand names, including Huggies, Pull-Ups, Little Swimmers, GoodNites, Kotex, Lightdays, Depend, and Poise. The Consumer Tissue segment offers facial and bathroom tissue, paper towels, napkins, and related products under the Kleenex, Scott, Cottonelle, Viva, Andrex, Scottex, Hakle, and Page brands. The K-C Professional and Other segment provides apparel, wipers, soaps, sanitizers, tissues, and towels under the Kleenex, Scott, WypAll, Kimtech, and Jackson Safety brands. The Health Care segment offers exam gloves, medical devices, and infection prevention products; and pain management products, respiratory, and digestive health and medical supplies under the Kimberly-Clark and ON-Q brands.
To review Kimberly’s stock, please take a look at the 1-year chart of KMB (Kimberly-Clark Corporation) below with my added notations:
After trending higher for most of the last year, KMB has been consolidating within a large Rectangle over the last (4) months. Rectangle patterns form when a stock gets stuck bouncing between a horizontal support and resistance. A minimum of (2) successful tests of the support and (2) successful tests of the resistance will give you the pattern. For KMB, the Rectangle pattern has formed an $88 resistance (red) and a $82 support (green). A break above $88 would also be a new 52-week high.
The Tale of the Tape: KMB has formed a large Rectangle pattern. The possible long positions on KMB would be either on a pullback to $82, or on a breakout above $88. The ideal short opportunity would be on a break below $82.
Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.
No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!
Christian Tharp, CMT