Business

Procter & Gamble gets an upgrade, but its chart hasn’t turned the tide yet


Procter & Gamble (PG) saw JP Morgan here on Friday raise its rating on the consumer products giant’s stock to overbought (buy) with a $155 price target. Check out the charts and indicators to see if they match P&G’s fundamental assessment.

In this daily PG bar chart, below, I can see a potentially weak chart. The price made an October low and then rallied in January but now the price is trading below the falling 50-day moving average and the falling 200-day moving average. Trading volume spiked in late December when prices were at a high, and that could indicate strong selling when prices are strong. The daily on-balance volume (OBV) line shows a peak in December/January followed by weakness, which indicates a stronger selling pattern. The Moving Average Convergence Divergence (MACD) oscillator is below the zero line but has signaled a short trade.

In the weekly Japanese PG candlestick chart below, I see a confusing picture (at least to me). Price is trading below the negative sloping 40-week moving average but I can see some lower shadows in February. The math says the trend is weak but the lower shadows tell me that the traders are rejecting the lows. The weekly OBV line has recently been neutral and the MACD oscillator is falling as it crosses below the zero line.

In the daily Points and Figure PG chart below, I can see a potential downside price target in the $129 area.

In this weekly PG chart, below, I see a similar downside price target of $129.

Final strategy: A fundamental upgrade from a company like JP Morgan will make many investors consider PG. This interest could translate into new buys, but current charts suggest that investors and traders should slow down when buying new.

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