Component Dow The Procter & Gamble Company (PG) is trading up around 1% in Wednesday’s premarket session after easily beating Q2 2021 estimates and boosting fiscal year revenue tips. The homewares giant posted earnings of $1.64 per share in the quarter, $0.13 better than expectations, while revenue rose 8.3% year-on-year. another to hit $19.25 billion, more than $500 million higher than consensus.
Key points to remember
- Procter & Gamble beat second-quarter 2021 revenue and earnings estimates, pushing the stock up 1%.
- Quarterly revenue increased by 8.3%.
- Defensive Actions have fallen out of favor in recent months.
- The stock could sell in the mid-$120s in the coming weeks.
The stock hit a new high in July, with strong revenue growth fueled by socially distant customers filling their shelves with non-durable goods. The company’s reputation as refuge also attracted buyers, at least until November, when investors began to dump these issues and buy battered salvage coins. A limited rise this morning suggests the group is still out of favor, given unusually strong quarterly metrics.
The Wall Street consensus on P&G shares is a “moderate buy” based on eight “Buy” and four “Hold” recommendations. No analyst is recommending shareholders to close positions and move to the sidelines. Price targets currently range from a low of $130 to a high of $169, while the stock will open the session more than $30 below the midpoint target of $157. Weak sentiment weighs on this misplacement, but defensive buying interest could return later this year.
A refuge is an investment that is expected to maintain or increase in value in times of market turbulence. Safe havens are sought by investors to limit their exposure to losses in the event of a market decline. However, the assets that are actually safe havens can vary depending on the particular market downturn. For an investment to act as a safe haven, investors must perform sufficient due diligence.
Procter & Gamble monthly chart (2007 – 2021)
A multi-year rally wave hit the 2007 high at $75.18 in 2013, triggering an immediate breakout that settled into a trading range between Support at this level and resistance in the middle of $80. An October 2014 rally to new highs failed in the first quarter of 2015, triggering a steep drop to a three-year low during the summer low”flash crash.” The stock returned to resistance in the fourth quarter of 2016 but failed to break after the presidential election.
A persistent decline from January 2018 dug into the second lowest since 2012 in May, setting the stage for a powerful rallying impulse that rose above 2015 resistance in January 2019. The stock posted exceptionally strong returns throughout of the year and through February 2020, peaking at $128 and rolling in a vertical downdraft that posted the third lowest in eight years in March.
A rebound in July completed a round trip into the February high, triggering an immediate breakout that peaked mid-$140 in October. An attempted November rally failed, while the decline in January 2021 completed a shallow double top breakdown when it broke above the range support at $134.68. The stock is testing new resistance on Wednesday, with an opportunity to move up that level and improve the intermediate technical outlook.
The balance volume (OBV) The accumulation-distribution indicator hit a new high in November and has now fallen to a four-month low. Unfortunately, both weekly and monthly stochastic oscillators have entered active selling cycles, increasing the odds that the bears will prevail here despite strong quarterly results, potentially confirming a double upper breakdown that exposes further decline at July support near $128.
A flash crash is an event in electronic stock markets where the withdrawal of stock orders quickly amplifies price declines. The result appears to be a rapid sell-off of securities that can occur within minutes, leading to dramatic declines.
Procter & Gamble shares are trading higher after a strong quarter, but growing technical headwinds suggest the upside will be short-lived.
Disclosure: The author held no position in the aforementioned titles at the time of publication.