Trading Procter & Gamble on Earnings - What the Charts Say Now

Procter & Gamble is edging higher after beating earnings estimates. Here's how to trade the stock now.
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Procter & Gamble  (PG) - Get Report shares were marginally higher on Friday, up a little more than 1% after reporting earnings.

The company’s fiscal third-quarter earnings of $1.17 a share beat estimates by 4 cents. Revenue of $17.12 billion grew 4.6% year over year but missed expectations by $80 million. However, organic sales growth of 6% breezed by expectations of 4.8% growth.

Was it a blowout quarter? Not necessarily. But organic sales were strong and business is steady. We’ve seen a rush to big-box retailers like Costco  (COST) - Get Report and Target  (TGT) - Get Report, so it’s no surprise that P&G had a decent quarter.

The stock is now just 3.6% off its highs, which is drastically better than the S&P 500’s 16% fall. Can the stock continue higher, potentially taking out those highs? Let’s look.

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Trading Procter & Gamble

Daily chart of Procter & Gamble. 

Daily chart of Procter & Gamble. 

Procter & Gamble's daily chart above looks like a seismograph that just got hit with a high-magnitude earthquake. Shares steadily climbed higher for months, before heavy volatility caused violent price swings in the stock.

More recently, bulls have regained control of P&G stock, as shares recently reclaimed the $120 level, as well as all of its major moving averages. Now hovering near $122, investors are unsure how to proceed.

I wouldn’t expect a Netflix  (NFLX) - Get Report type of breakout anytime soon, but that doesn’t mean bulls can’t maintain control of Procter & Gamble stock. First, look to see if shares can maintain above the 100-day moving average near $120.40. That mark has been support in the recent days, while resistance has come into play near $123.

Over this week’s high at $123.42 and shares can start to move back into the $126 to $128 zone. There it faces resistance from 2020. Bulls will need to muster up strength if they want to see a breakout in Procter & Gamble stock that propels shares to $130-plus. This may be a difficult feat though, particularly as we are getting a less-than-explosive post-earnings rally while the broader market is seemingly teetering on a potential pullback after a 30% rally from last month’s lows.

On the downside, the $119 to $120 area is important, with both the 100-day and 200-day moving averages nearby. Below the 200-day puts the $116 level and the 50-day moving average on the table.

Below that and the backside of prior downtrend resistance (blue line) is a possible landing spot for Procter & Gamble stock. From here, let’s see if shares can clear $123 on the upside and hold support at the 100-day on the downside. A break of either could create a continuation play.