Organic products & strong technicals support bullish picture for Proctor and Gamble

Proctor and Gamble is another stock which continues to buck the short term trend currently being set by the indices as worries over the Sino US tariff talks continue to dominate with risk-off sentiment prevailing. Bur for PG bullish sentiment is being driven by both technical and fundamental factors.

From a fundamental perspective, it was last months strong results which provided the foundation for the move higher, with the consumer goods company reporting earnings of $1.06 on sales of $16.46 billion beating analysts forecasts of $1.03 and $16.36 respectively. The beauty segment, in particular, delivered a very strong performance with sales of organic products up over 9% and duly raising the forecast for this sector for the year-end.

From a technical perspective, this bullish momentum has been developing since the start of the year, as the stock moved firmly away from the volume point of control denoted with the yellow dashed line at $90. The key level breached initially was the strong resistance region at $92.80 and denoted with the red dashed line on the accumulation and distribution indicator, with a wide spread up candle on good volume. The move was then given a further injection with a repeat during mid March on higher volume, and notice the weakness which preceded this with falling price and falling volume, a sign of a lack of selling pressure.

Now with light volume ahead on the weekly chart, we wait for minor resistance to be breached in the $107 area before a further move higher develops. Note also the trend monitor indicator which has remained firmly blue since August last year and continues to support the positive outlook for this stock.

By Anna Coulling

Charts from NinjaTrader and indicators from Quantum Trading