Kimberly-Clark (KMB) Stock Chart Looks to a Rally
NEW YORK (TheStreet) -- We covered Kimberly-Clark (KMB) - Get Reportlast week, and recommended purchases on dips into the $119 to $118 area. Trading in KMB has been firmer than anticipated, with shallow dips that only briefly ventured below $120. We have a few rules of thumb on trading, and one of them is that when a stock acts stronger than anticipated -- that is, it exceeds a price target or stops short of a support area -- we should take notice.
In this first chart of KMB, above, we want to draw your attention to the price action of the past two weeks. Notice the sharp advance followed by the sideways price action. Technicians and chartists call this short-term consolidation a flag pattern. A flag pattern consists of a sharp rally, which chartists call the "pole," followed by a few days of sideways to lower price action, as traders and the market digest the sharp runup. After the flag, the pattern typically continues the prior trend -- in this case, up. We would cancel any bids in the $119 to $118 area and look to buy any dip on KMB towards $120 or a breakout over $122.
In this longer-term look at KMB, we can see the bullish position of the Moving Average Convergence Divergence oscillator and the recent upturn in the On-Balance-Volume line. We'll look for a rally in KMB to the $130 to $135 area.