Procter & Gamble is Battling More Than Ackman

• Posted by Greg Harmon
• on July 22nd, 2013

Procter & Gamble, $PG, was a sleepy stock slowly rising over time ad paying a nice dividend. Until Bill Ackman got involved. Moving to the center stage it has been a stock for growth. But as it runs into earnings next week (August 1st) it is playing two roles, that of an energized stud and that of a tired old man. Take a look. The daily chart below shows a stock that is primed for a breakout. Hitting the top of the expanding channel for the third time. A break above carries a target of 88. And the small pullback over last week creates a Measured Move higher to 86.50. With a rising and bullish Relative

Strength Index (RSI) and a Moving Average Convergence Divergence indicator (MACD) that is also rising it has support to break out. But a jump out to looking at the monthly chart shows a bit of a different picture. That wedge consolidation on the daily chart looks more like long topping tails. And it comes at the completion of an AB=CD pattern and at the top of the Andrew’s Pitchfork, Upper Median Line. The Bollinger bands are also quite wide, and the last 2 times this has happened, with the price at the top of the Bollinger bands, it has dropped quickly. All of these indicate this is a good place for a pullback. The Median Line or perhaps a bit of an overshoot is a good target and perhaps earnings will be the catalyst.

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