Colgate-Palmolive, $CL, started up out of a double bottom in February. It fell back to retest the break out twice before the current move to higher consolidation. Friday saw the price push over consolidation and it is now ready to test the September high. The Measured Move out of this zone is to 71, with a second Measured Move to 71 as well.
The RSI is rising in the bullish zone with the MACD flat but positive. There is resistance at 69.20 and 71 then 72.50 and 74.70 before 76 and 77.50. Support lower comes at 67.40 and 66.50 then 65.85 and 65.40. Short interest is low at 1.4%. The company is expected to report earnings next on April 26th. The stock pays a 2.50% dividend and will start trading ex-dividend on April 17th.
The April options chain shows the biggest open interest at the 67.50 call strike. The April 26 Expiry options show open interest at the 65.50 and 67.50 put strikes, as well as from 67.50 to 70 on the call side. That strike implies about a $3 move by expiry. The May expiry shows the biggest open interest at the 65 call by far. There is sizable open interest at the 65 and 60 put strikes.
Colgate-Palmolive, Ticker: $CL
Trade Idea 1: Buy the stock on a move over 68.80 with a stop at 67.40.
Trade Idea 2: Buy the stock on a move over 68.80 adding an April 26 Expiry 67.50/65.50 Put Spread (95 cents) and selling the May 70 Calls (98 cents).
Trade Idea 3: Buy the April 26 Expiry/May 70 Call Calendar (70 cents).
Trade Idea 4: Buy the May 65/70 bull Risk Reversal (70 cents).
After reviewing over 1,000 charts, I have found some good setups for the week. These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday which heading into the shortened pre-Easter week sees the equity markets continuing to grind higher but remaining short of their all-time highs.
Elsewhere look for Gold to consolidate in a tightening triangle while Crude Oil advances higher. The US Dollar Index continues to consolidate sideways while US Treasuries pull back retesting their break out. The Shanghai Composite looks to pause in its uptrend while Emerging Markets are biased to head higher.
Volatility looks to remain at very low levels keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. The SPY and QQQ seem ready to retest their all-time highs while the IWM has gotten caught up at resistance and continues to churn sideways. Use this information as you prepare for the coming week and trad’em well.
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.