Procter & Gamble Stock Now Entering a Low-Risk Buy Zone

NEW YORK (TheStreet) -- Procter & Gamble (PG)  has fallen into a very low-risk buy zone. After several months of hitting lower lows, the stock is overdue for a rally.  

Shares of the consumer packaged goods company dropped to new lows on Friday after taking out the April low as selling pressure surged. Shares closed last week just pennies above a very key support zone. This area includes a major spike low left behind back in late July of last year as well as the huge upside gap that followed.

Shares are currently trading close to $79. A drift down to the $78 level will fill the powerful breakout gap left behind on Aug. 1. This marks the top band of this key support area. The lower band is marked by the major spike low the stock left behind during the prior session. 

A healthy rebound off the $78 area would relieve a tremendous amount of pressure that has dominated P&G's action all year. In late 2014, the stock topped out just below $94 after completing a powerful bull run off the July spike low. This major move began with an earnings-inspired surge on Aug. 1. PG closed the session with a 3% gain after gapping to the upside on the bell. A great deal of momentum was unleashed as August began sparking a five-month rally that would push shares 22% higher.

Now, nearly five months after the December peak, P&G has retraced nearly this entire run. With a sixth straight lower monthly low a possibility, the stock is overdue for a rally.

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