Bloomberg News

For Clorox (CLX - Get Report) , a 5.69% gain is certainly noteworthy and that's exactly what we got on Monday, with shares rallying to $158.38.

Clorox is on the move after the company released better-than-expected earnings, reporting $1.40 in earnings per share, 11 cents ahead of expectations. Second-quarter revenue grew 3.5% year-over-year and came in-line with estimates. Margin improvement helped pave the way, with gross margins expanding 70 basis points to 43.7%.

"Sound execution of our pricing and cost-savings plans has enabled us to address near-term headwinds, resulting in another strong quarter of top line performance," Clorox chairman and CEO Benno Dorer said in the company's press release.

Further, the company said it "remains on track" with its sales and earnings for the year, giving investors a sigh of relief. At the moment, Clorox expects full-year sales to grow 2% to 4% and for earnings to come in between $6.20 and $6.40 per share.

Currently, analysts are near the midpoint of those expectations, calling for 3.2% sales growth in 2019 and for earnings of $6.32. Should Clorox achieve the latter, it will represent 2.3% growth from fiscal 2018. However, it could open the door to an acceleration in earnings growth for 2020, with estimates currently calling for 6.5% growth.

All that said, how do we trade this stock?

Trading Clorox Stock

14-month daily chart of Clorox stock
14-month daily chart of Clorox stock

With Monday's move higher, Clorox is now just a stone's throw away from hitting its 52-week highs near $167. Shares flirted with this level multiple times as Clorox stock chopped near $165 in late November and early December. The stock then broke down with the rest of the market, but failed to recover.

Earnings on Monday are making up for it, though, as CLX stock propels its way higher. Now what?

Looking at the chart now, it's clear there's solid support near $145. This was a prior high during 2017, but has become support now that Clorox stock pushed through the mark in September. After temporarily falling below this level a few times over the past few months, Clorox was quick to recover each time. Its earnings move also propelled Clorox stock over short-term downtrend resistance (purple line), as well as the 50-day and 100-day moving averages. This was a strong move!

However, it's coming up to the underside of prior uptrend support (blue line). I want to see if Clorox will grind up to this level and the $165 area. If so, will it peter out or push through? Basically, I want to see whether this area will gave way to new highs or again act as resistance. If it's the latter, let's see if resistance is strong or only temporary.

This article is commentary by an independent contributor. At the time of publication, the author had no positions in the stocks mentioned.