Here's When You Should Buy Procter & Gamble

Procter & Gamble appears headed for a fresh breakout.
By Gary Morrow ,

Shares of Procter & Gamble (PG) - Get Report finished off their post Brexit rebound with a close at new 52-week highs on Thursday. Just one week ago, P&G appeared headed for a breakout after closing above heavy resistance near the March/April highs. With Thursday's solid gain on the stock's heaviest upside trade since mid-March, a fresh breakout appears on the way.

Since mid-February, P&G has been trapped in a very narrow consolidation pattern. During this healthy action, heavy resistance just below $84 capped the upper band of trade. On the downside, the stock held very solid support near the $79.50 area, which limited the downside despite an overbought reading at the February peak.

Click here to see the below chart in a new window. 

As P&G entered June, it was working in a second straight higher monthly low and was leaving behind three monthly lows near $79.50. A resolution to the upside was looking increasingly likely as June 3 came to a close. Unfortunately for the bulls, another three weeks of frustrating action was ahead. P&G now appears ready to resume the early June rally.

P&G's sharp rebound from the recent flush has left behind multiple layers of support. With the stock now at new highs, investors should consider shares a buy on a pullback. A fade back down to the $83-to-$83.50 area would offer a very low-risk buying opportunity for patient bulls. This key zone includes the May high as well as Wednesday's upside gap.

From a fundamental perspective, Procter & Gamble is a holding in Jim Cramer's Action Alerts PLUS charitable portfolio. Cramer and Research Director Jack Mohr wrote recently that "we continue to like the company's globally recognizable brand, which offers a relatively stable and predictable business. In addition, the stock's status as an equity-bond (yielding almost 3.3%) makes it not only an incredibly attractive versus 10-year Treasury yields, but also a safe haven bet while we continue to drill through the various risks facing the global economy."

Disclosure: This article is commentary by an independent contributor. At the time of publication, the author was long P&G.

Loading ...