Stock of the day: Colgate-Palmolive
02 October 2024
In today's talk of the day, I would like to focus on Colgate-Palmolive, which is nearing a critical sell signal. On the chart, we can observe a Head and Shoulders pattern, highlighted by the yellow rectangle. This pattern is approaching a decisive moment, as the right shoulder of the formation is now fully developed, and the price is currently resting on the neckline, marked by the red line.
Furthermore, we also have a black uptrend line connecting higher lows since October 2023, which adds another layer of significance to this setup. Both the neckline and the uptrend line are acting as crucial supports. So, how should traders approach this setup? If the price closes below these two supports—the red neckline and the black uptrend line—it would be a strong long-term sell signal. However, should the price bounce off these supports, it could signal an opportunity to go long. The direction chosen at this critical juncture will be key for determining Colgate's next move.