Procter & Gamble is crashing. Investors should follow technical indicators to trade the stock
- Procter & Gamble is taking measured response to sanctions on Russia against investors’ expectations.
- Decisions on sanctions will send the stock crashing, but full compliance will not get the stock back up.
- PG will crash to $125 before the price can reverse the trend.
The Procter & Gamble Company (NYSE:PG) announced a measured retreat from the Russian market. The decision may not settle well with conscious investors.
PG ceases all capital investments and promotional activities in Russia. It will also reduce the product portfolio to maintain only the very basic health, hygiene, and personal care products.
Investors feel that PG’s reaction may not be a sufficient response to the invasion of Ukraine by Russia, hence a sell-off for the stock.
While PG notes that it will continue to adjust as necessary, further actions in compliance with sanctions and investor expectations will not get the stock back up. The events, however, give investors technical trading opportunities that are worth watching.
PG’s stock projected crash to $125Copy link to section
PG declined from $154 to $144 this week. The stock just gained momentum on the declining trend. MACD issues a double signal for a sell on the stock. RSI crashing from 70 a month ago to the current level of 40 is an indication that the share price is on a downward spiral.
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This analysis keenly notes that the RSI’s SMA 14 at 66 is still sending signals of an overbought stock. The huge divergence from 66 to 40 points that the stock will decline further before the trend can be reversed.
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We think that PG will test the oversold indicator of RSI 30 before turning up. This will occur at prices close to $125.
SummaryCopy link to section
PG’s response to the sanctions on Russia will send the stock crashing down. However, full compliance with the sanctions would not get the stock back up. Investors can still learn from technical analysis to take a position when the stock hits a bottom.