- December 1, 2008
- Posted by: Ramki Ramakrishnan
- Category: US Stocks outlook
You might be wondering if Colgate Palmolive is preparing for a strong move higher. The weekly charts show that the stock has reached its Elliot Wave targets (a 3-wave correction that also complies with some Fibonacci projections). The daily charts show higher bottoms, and a period of consolidation with the stock tantalizingly poised near the upper boundary. Let me start by saying that typically, a strong break above the upper boundary in the attached chart should be quite positive for the stock. However, given the fact that the weekly indicators are still negative, there is a chance that such a break will fail to be sustained, and we could see it fall back, perhaps for one last time this season, and just when those who bought the stock on the break above the line now throw in the towel, we will turn around and race higher! (I am not trying to be dramatic, or even prophesize here. I have watched such action over and over again so many times in my career that you better be forewarned of the possibility). Anyway, take a look at the two charts below and you can decide your course of action. I personally will wait to see if we get that final move down before buying.