Clorox Stock Chart: A Clean Earnings Trade?
Clorox (CLX) – Get Clorox Company Report may be better known for its 2.8% dividend yield than its aggressive stock charts.
However, the stock became a fixture during the COVID-19 pandemic as it was clear that demand for cleaning products would be through the roof from consumers and businesses.
While this helped tip the stock into a major breakout from multi-year resistance, we have since seen Clorox stock drop to the high it hit in August 2020.
At the recent low in October, stocks were down about 35% from the highs and below the major breakout of the pre-COVID epidemic.
Although most investors expected Clorox stock to stop trading as a high-growth tech stock, few expected it to drop out. all of its COVID-related earnings.
Now trading up around 2.5% on Tuesday after better than expected earnings, investors want to know if this is a stock they can own again.
Let’s look at the chart to see how the techniques line up.
Trading Clorox Stocks
A weekly chart shows how vital the $166-$167.50 zone had been for Clorox before the coronavirus pandemic.
This area saw significant resistance starting in 2018 and even provided the stock with quite a bit of trouble once COVID was clearly a global pandemic. The breakout sent stocks above $200 and to a high near $240 before pulling back.
With Tuesday’s post-earnings rally, stocks are now recovering that key breakout zone.
However, it comes with a 200-week moving average test. If this moving average acts as resistance, the bulls risk the stock being pushed back from the previous breakout zone.
If so, the key $160 support zone remains vulnerable. A break of this level puts last month’s low at $156.23 into play.
If Clorox can build above $166, the bulls may be able to argue that they are long. However, a break above Tuesday’s high and the 21-week moving average can really open things up.
In that case, closing the gap from the company’s earlier earnings reaction in early August could be on the table, up near $179. This is followed by the decline of the 50 week moving average and the resistance of the declining channel.
If Clorox finds a way through all of these levels, the low $190s are on the table, followed by a potential push to $200 or beyond.