4 Trade Ideas for Clorox: Bonus Idea

• Posted by Greg Harmon
• on December 30th, 2019

Here is your Bonus Idea with links to the full Top Ten:

Clorox, $CLX, has bounced around in a $25 range for the past 15 months. it moved off the bottom of that range at the end of November and stalled as it hit what has been both resistance and support since July. A pull back to the 20 day SMA and it reversed to enter the week back at resistance. The 200 day SMA has also joined the mix. A push over the top would give a target to 159, still short of the top of the range.

The RSI is rising in the bullish zone with the MACD moving higher and positive. The Bollinger Bands® are also shifting higher. There is resistance at 153.60 and 156 then 158 and 160 before 162.25 and 165. Support lower comes at 152 and 150 then 147 and 145. Short interest is moderate at 6.5%. The company is expected to report earnings next on February 3rd. the stock pays a dividend, currently yielding 2.76%, and will begin trading ex-dividend on January 28th.

The January options chain shows the biggest open interest at the 145 put strike with some size at the 150 put as well. On the Call side it is big from 150 to 160. The February 7 Expiry is just starting to build open interest. The February regular options chain is biggest at the 155 call. The April chain has biggest open interest from 150 to 170 on the call side.

Clorox, Ticker: $CLX

Trade Idea 1: Buy the stock on a move over 154 with a stop at 152.

Trade Idea 2: Buy the stock on a move over 154 and add a February 7 Expiry 152.50/145 Put Spread ($2.80) while selling the April 165 Calls ($1.75).

Trade Idea 3: Buy the January/February 160 Call Calendar ($1.40) while selling the February 7 Expiry 145 Put ($1.30).

Trade Idea 4: Buy the February 145/155/160 Call Spread Risk Reversal for 30 cents.

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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 with just 2 trading days left in the decade saw equity markets showing signs of tiring after a long run higher.

Elsewhere look for Gold to continue its move higher while Crude Oil joins it on the path higher. The US Dollar Index looks to continue to the downside while US Treasuries consolidate in their downtrend. The Shanghai Composite looks to continue to consolidate while Emerging Markets move higher over long term resistance.

The Volatility Index looks to remain very low making the path easier for equity markets to the upside. Their charts look strong on the longer timeframe, but are starting to look extended on the shorter timeframe. Both the QQQ and SPY could use a reset on momentum measures and the IWM is already digesting its move. Use this information as you prepare for the coming week and trad’em well.

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

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.

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