More importantly, the sideways trading that KMB's been showing us has been orderly: all of the stock's price action has been consolidating in a price pattern called a rectangle. Sideways consolidations aren't something to be too worried about -- instead, they're completely normal, especially after a big move higher. They give investors an opportunity to catch their breath and figure out their next move.
At the top of the rectangle, we've got a resistance level at $87.50, and at the bottom, we've got horizontal support at $82. Essentially, we're waiting for a breakout through one of those prices to give us our trade signal. Typically, rectangles are continuation patterns, which means that they resolve in the same direction as previous price action. For KMB, that makes more upside a likely outcome in November. Either way, it's crucial to wait for the move outside of the channel before putting any money on the line with this stock -- you want current investors to make up their minds about KMB before you do.
Vodafone Group Plc
The last few months have been rough going for shares of UK-based Vodafone Group Plc (VOD). The global mobile communications giant has dropped more than 13.5% in the last quarter, shoved lower as a textbook bearish pattern triggered and sent shares towards support. But now that this stock has caught a bid, there's a buying opportunity again.A head and shoulders top triggered back in late October when VOD broke through the neckline level at $27.50. After that, shares fell to their nearest strong support level at $24.50, a price level that got pointed out back in the middle of May, the last time VOD tested its "price floor". Now, as with then, shares are bouncing hard off of support. That means that investors looking for an opportunity to buy shares of Vodafone have a lowered risk profile if they pick up shares now. The broken downtrend in momentum adds some extra evidence to VOD's change in trend. Momentum is a leading indicator of price, so the move to an uptrend in RSI bodes well for Vodafone buyers right here. If you decide to pick up shares here, it makes sense to put a protective stop just on the other side of $24.50.
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