Procter & Gamble (PG) is taking out last week's low today. The stock is off just over 1% and is now at fresh November lows. The consumer goods company has been struggling below its 200-day moving average since the ugly Nov. 10 breakdown as a stronger dollar put extreme pressure on big U.S. exporters. More downside for this A-rated firm is likely in the near term.
Last week's two-day selloff, on Nov. 9 and 10, left behind an ominous spike high. In late September and into early October Procter & Gamble was under extremely heavy accumulation as it reached new 52-week highs. After the mid-October breakdown the stock battled back with the help of a strong earnings report but the upside momentum was short-lived. P&G remained soft during the two and half weeks after the earnings breakout. The stock, though damaged, remained above its 200-day moving average until last Thursday. This overhead pressure is in control of the action now.
As pressure increases P&G investors should keep a close eye on the $81 to $80 area. This major support zone is marked by the stock's 40-week moving average as well as the June/Brexit low. Considering the deeply oversold MACD (moving average convergence/divergence indicator) development as this key zone comes into play, a very low-risk entry opportunity will present itself if a base can be built near the June low.