Procter & Gamble Beat On Earnings, But Shares Slump On Inflation Outlook. Here’s How To Trade The Stock Now.

Procter & Gamble
beat Wall Street estimates for its first-fiscal quarter on both earnings and revenue. The stock declined however as the company raised its outlook for inflation. Higher costs for commodities and freight could be a drag on fiscal 2022 earnings.

P&G has a P/E ratio of 25.15% with a dividend yield of 2.44%, according to Macrotrends. The company has beaten earnings-per-share estimates in 26 consecutive quarters.

P&G should be able to offset costs, by raising prices on its products on grocery shelves. This has been an issue this year and potentially into 2022. Repackaging into slightly small containers could solve this issue.

The Daily Chart for Procter & Gamble

Procter & Gamble declined 17.3% from a high of $146.92 set on November 9, 2020, to a low of $121.54 set on March 4. From this low the stock rose 21.1% to its all-time intraday high of $147.23 set on September 13.

P&G has been above a golden cross since July 12 when the 50-day simple moving average rose above the 200-day simple moving average. A golden cross is a buy signal.

The upper horizontal line in the chart is this month’s risky level at $144.32 where profits could have been taken.

The post-earnings low of $138.80 was above the quarterly value level of $138.41 with the annual pivot at $137.21. These levels are the lower two horizontal lines. The semiannual pivot at $143.46 is the horizontal line below the highest horizontal line which is this month’s risky level at $144.32.

Today the stock is below its 50-day SMA at $142.97 and above its 200-day SMA at $136.30.

The Weekly Chart for Procter & Gamble

The weekly chart for P&G is negative with the stock below its five-week modified moving average at $142.13. The stock is well above its 200-week simple moving average or reversion to the mean at $113.36. The 12x3x3 weekly slow stochastic reading is declining at 56.59.   

Trading Strategy: Buy Procter & Gamble on weakness to its quarterly and annual pivots at $138.41 and $137.21, respectively. Reduce holdings on strength to its semiannual and monthly risky levels at $143.46 and $144.32, respectively.

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