Paper maker Kimberly Clark (KMB) is another stock that broke out in Wednesday's wildly bullish session. Shares of the firm had seen a reasonably strong showing in 2012, climbing around 10% even while the broad market was struggling to hold its ground. For the last month and change, shares had been consolidating in a rectangle pattern, a formation that's common after a large price move.
The rectangle gave KMB investors a chance to absorb the big rally in April before deciding what to do with their positions.The breakout in KMB above the rectangle's resistance level at $79 is a buy signal for shares of this stock, even though shares have climbed a bit above that price at this point. KMB shareholders should look to $77 as a critical stop loss level -- after all, it's a price level where there's historically been a glut of demand for shares of KMB. If this stock suddenly can't catch a bid at $77, it's time to exit longs.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV