Don't Ignore This Chart!

Time To Clean Out Your Portfolio?

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The discussion about market tops seems to dominate most of the news. With the exception of severe market collapses, usually the market rotates through different sectors in the business cycle, even during down times. The market top in 2015 saw Clorox rise 30% in the next year while the index pulled back. Recently, my eye was drawn to Clorox (CLX), looking for a strong, defensive stock. If the growth areas of the market are on pause, we might see some transition into more defensive names. Clorox (CLX) owns a beautiful 5-year chart that looks like it is getting ready for its next breakout. After a 4-year rocket ride, the stock paused when the financials started to pick up the pace in 2016. Clorox is back near all time highs but more importantly, it looks like it want retest the recent false breakout. 

After the false breakout, the stock pulled back. It did not make a lower low and continues to press the upside. Tuesday's close was back above the 2016 high and $0.07 short of the highest close in March.  While the dividend isn't huge, it is hovering around 2.4%.

Good trading,
Greg Schnell, CMT, MFTA

 

Announcement from the Author

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Greg Schnell
About the author: , CMT, is a Senior Technical Analyst at StockCharts.com specializing in intermarket and commodities analysis. Based in Calgary, he is a board member of the Canadian Society of Technical Analysts (CSTA) and the chairman of the CSTA Calgary chapter. He is an active member of both the Market Technicians Association (MTA) and the International Federation of Technical Analysts (IFTA).

Greg is also the co-author of Stock Charts for Dummies (Wiley, 2018). Greg joined StockCharts.com in 2012 and has be instrumental in helping launch a variety of new blogs and other commentary platforms. Presently, Greg contributes market analysis commentary to The Canadian Technician, Commodities Countdown and Don't Ignore This Chart blogs. Learn More
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