Proctor and Gamble is a stock I have had my eye on for some time, and last week was when the price action developed as expected, breaking away from the VPOC (volume point of control) with several classic signals to confirm this weakness.
However, the key to last week’s move should be seen in the context of the repeated attempts to rally and in particular the injection of volume in the middle of December. Moreover, the strong level of resistance in the $139.80 per share area was helping to cap advances in this stock. Then comes the breakdown in January with the potential platforms of support in the $136.40 area and lower at $134.90 both breached, the second being the more significant in terms of the development of the bearish trend. The move lower was also accompanied by rising volume on the daily chart and note how the candles are shaped with deep wicks to the upper body, classic signs the waterfall is strengthening as each attempt to rise is overcome with selling.
Moving to the weekly chart and here we get some idea of where this move is likely to pause and with a low volume node on the VPOC histogram unlikely to offer any immediate respite to the current bearish trend the next logical pause point is the reasonably strong price based support in the $125 per share area and denoted with the red dashed line of the accumulation and distribution indicator would be favourite. However, if this is breached a move to the VPOC itself at $119 comes into play. Note too the trend monitor is also in transition.
By Anna Coulling
Charts from NinjaTrader and indicators from Quantum Trading
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