- December 8, 2022
- Posted by: Tradingshot Articles
- Category: Stocks
Procter & Gamble (PG) has been on a relentless +23% 2-month rally (since October 10), breaking above all possible MA levels: the 1D MA50 (blue trend-line), the 1D MA100 (green trend-line) and the 1D MA200 (orange trend-line). Today it even broke above the August 16 High, the technical Resistance, making the first Higher High after breaking above the 2022 Falling Wedge pattern.
However despite the bullishness and us being long-term buyers on PG, we see the price approaching a level, which based on previous similar patterns, provided a sizeable medium-term pull-back.
That is the RSI on the 1W time-frame which has entered a Zone (red) that since December 2015 makes the price drop to (just below) its 0.382 Fibonacci retracement level. In January 2016, it found support on the 1D MA100, in October 2018 just below the 1D MA100 and 1D MA200 and in May 2020 some way below the 1D MA50.
At the moment the lowest MA is the MA50 but until the pull-back takes the stock lower, we expect the MA100 to be lower and quite possibly on or a little below the 0.382 Fibonacci, assuming this rally gets exhausted a little higher e.g. 153.00. This translates into a 0.382 Fib at 141.20, which makes $140 a fair pull-back price to buy for the next long-term wave to test the 165.40 All Time High Resistance.