Colgate-Palmolive Co. built an extremely large base mostly between $55 and $70 for almost a full year (dashed lines). In early June (A), the stock rallied to the top of the trading range to confirm the breakout and then continued to rise to a high of $87 (B). The stock pulled back toward its 40-week moving average (40wMA) in early 2010 (C) and now appears ready to resume the up-trend (D). Only a sustained decline below the 40wMA (currently at about $80) would reverse the current long-term up-side potential.
Point & Figure measurements provide targets of $99 and $109. The large area of accumulation (see dashed lines) supports significantly higher Point & Figure targets.
Ron Meisels is a contributor to the www.NA-marketletter.com web site. Monica Rizk is the senior Technical Analyst for Phases & Cycles Inc. They may hold shares in companies profiled. Please see the site for a glossary.
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