Bear Chart of the Day: Wait Until Clorox Cleans Up Its Act

NEW YORK (Real Money) -- "Chlorophyll? More like borophyll! Right?" Sometimes Billy Madison wisdom fits the markets. For now, boring is as good as bearish. Mergers are lighting up the screens, but there's a lot of choppy action. 

While recently I discussed a name considered somewhat "boring" and argued this wasn't a bad place, today I will counter that with a boring stock that looks like it is going to stay boring -- not only in terms of news, but also price action.

Clorox (CLXtakes the prize today. This is a short-term call as the long-term picture still looks boring as well.

Until Clorox takes out new highs in terms of price, I don't think we get a good entry unless we are lower. Short of a rumor where a big name takes a huge stake in the company, I have a hard time seeing that new high before we test lower. Price lost multiple support levels late last week. The initial pullback wasn't a problem -- well, at least not at first. At first, the pullback simply looked like a bullish flag consolidating the May bounce; however, something changed over the last week. The stock failed to bounce off the first support (blue solid line) and managed only a one-day bounce off the secondary support.

Resistance (downward-sloping blue dotted line) has now taken control. Upside looks like a dollar here, while downside is at least twice that, if not more. These aren't the risk-reward metrics I like to see on a stock if I'm bullish, but I do like this type of setup to start thinking bearish.

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