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1/19/99 Clorox
Co (CLX)
Points to watch: Stock has retreated to the lower
end of the 107-117 trading range that it has been in since early November and will likely
break out to the downside. A double top, with peaks on 11/19 and 12/31, formed at
117.5 on the daily chart and was confirmed on Wednesday when Clorox broke below December's
lows. The stock fell below its 55 day moving average on Wednesday, and tested the
average but was unable to move back above it on Thursday and Friday. Strong support
(the 25% retracement of the September to November rally) exists at 108.25. The stock
tested and held Gann support at 108.5 on Thursday and Friday. Daily MACD showed a
strong divergence with price action at the December peak, and gave a sell signal on
Wednesday. Daily RSI and stochastics also showed divergence with price on the second
peak and are in downtrends. Weekly and daily OBV are in downtrends. Sell, or
short on a break below 107-108, placing a stop between 112- 117. Initial downside
target is the Gann 1x4 angle (drawn from the April 1994 lows) at 84. Clorox tested
and held this angle during September's lows.
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Last modified: April 02, 2001
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