However, the stock became a go-to play during the COVID-19 pandemic, as it was clear that demand for cleaning products would be through the roof from consumers and businesses alike.
While that helped jolt the stock into a major breakout over multi-year resistance, we’ve since seen Clorox stock fall the high it made in August 2020.
At the recent low in October, shares were down about 35% from the highs and were below the major breakout from the pre-COVID outbreak.
Although most investors expected Clorox stock to eventually stop trading like a high-growth tech stock, not many were looking for it to give up all of its COVID-related gains.
Now trading higher by about 2.5% on Tuesday following better-than-expected earnings, investors want to know if this is one they can own again.
Let’s look at the chart to see how the technicals are aligning.
Trading Clorox Stock
A weekly chart shows how vital the $166 to $167.50 area had been for Clorox leading up to the coronavirus pandemic.
This zone was significant resistance from 2018 and even provided the stock a fair amount of trouble once COVID was clearly a global pandemic. The breakout sent shares above $200 and to a high near $240 before retreating.
With Tuesday’s post-earnings rally, shares are reclaiming this key breakout area now.
However, it comes with a test of the 200-week moving average. If this moving average acts as resistance, bulls risk the stock being rejected from the prior breakout area.
If that’s the case, the key $160 support area remains vulnerable. A break of this level puts last month’s low in play at $156.23.
If Clorox can build above $166 though, bulls may be able to make a case for being long. However, a move over Tuesday’s high and the 21-week moving average can really open things up.
In that case, the gap-fill from the company’s prior earnings reaction in early August could be on the table, up near $179. That’s followed by the declining 50-week moving average and downward channel resistance.
Should Clorox find a way to clear all of these levels, the low-$190s are on the table followed by a potential push to $200 or beyond.