Procter & Gamble (PG) is Setting Up for a Big Move

Procter & Gamble Co. engages in the provision of branded consumer packaged goods. It operates through the following segments: Beauty; Grooming; Health Care; Fabric & Home Care; and Baby, Feminine & Family Care…

 

Take a look at the 1-year chart of Proctor & Gamble (PG) below with my added notations:

PG is consolidating within a common chart pattern known as a symmetrical triangle. A down trending resistance combined with an up-trending support forms the triangle pattern (blue). Since there is no true way to know which way the stock will break, some traders may wait for the breakout or breakdown before entering a trade. 

PG has formed a symmetrical triangle. A trader could enter a long position on a break above the down trending resistance with a stop set under the entry level. However, if the stock were to break below the trend line support, a short trade could be entered with a stop above the trend line.

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!

Good luck!

Christian Tharp, CMT

@cmtstockcoach