Nelson Peltz's Trian Fund Management is fighting for a single seat on the P&G board and the company is fighting back. A combined 60 million is being spent to influence largely individual shareholders.
P&G is relying on its record over the last several years to sway voters. Shares are up 24% over the last two years, outperforming the Consumer Staples Select Sector SPDR Fund (XLP) - Get Report and the S&P 500 index in that time. It pulled back from its recent all-time highs and is attempting to hold above its 50-day moving average.
Let's take a look at the P&G chart and see what the technical indicators are saying about the future direction of the stock price and potentially the outcome of the vote.
The stock broke out of a large triangle pattern in late July and continued higher. By September, it had completed the pattern price objective of the triangle, measured by taking its height and adding it to the triangle breakout level. After achieving this price objective, an eveningstar pattern formed on the chart. An eveningstar is a three-day bearish reversal pattern that consists of a strong up day, followed by a narrow opening and closing range "doji" candle, and completed by a large down day. It represents a transition in investor sentiment from bullishness to bearishness.
The stock price headed lower before finding support last month in the $90 area, the former February and March highs. It managed to bounce off this level and has returned to its rising 50-day moving average.
Daily moving average convergence/divergence is overlaid on a weekly histogram of the oscillator, and is trending lower on both time frames. This represents a loss in positive price momentum and negative short-term trend direction. The relative strength indicator is tracking lower and is below its center line. Chaikin money flow has been headed lower since the formation of the eveningstar pattern and is now in negative territory. The technical indicators are more reflective of the September decline and have not fully factored in the October bounce, but the short-term trend is lower.
The vote Tuesday may be a fundamental catalyst that either takes the stock price back above $93.00 level, which would be bullish over the intermediate term, or sends it lower confirming the current technical indications, which would be bearish over the intermediate term.
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The author is an independent contributor and at the time of publication had no position in the stocks mentioned.