From Philipp Pfitzenmaier at Trade with Precision:

The Dow Jones Industrial Average (US30 Cash) is an ongoing uptrend on the daily timeframe, where price has recently pulled back to a level of equilibrium at or around the rising 10 and 20 MA. So, I’m currently scanning my watchlist for trading opportunities aligning with this direction: long.

20160412 twp1

One US stock has caught my attention and I would like to explain why I plan to keep a close eye on this company and what a potential trade could look like.

Procter & Gamble is an American multinational consumer goods company and there is a fair chance that you are already using some of their products without even knowing the company behind the brand. Their products range from cleaning detergents to crisps; from diapers to shavers!

So why is Procter & Gamble on my watchlist? If we have a look at the weekly chart, we can see steady upward movement without too much volatility. The moving averages are in the correct order (I am neglecting the 200 period MA for now, as this will most likely be in the correct order by the time my potential trade sets up). Price is currently very close to the buy zone on the weekly chart and the MACD and RSI indictors are convergent.

20160412 twp2

One US stock has caught my attention and I would like to explain why I plan to keep a close eye on this company and what a potential trade could look like.

Procter & Gamble is an American multinational consumer goods company and there is a fair chance that you are already using some of their products without even knowing the company behind the brand. Their products range from cleaning detergents to crisps; from diapers to shavers!

So why is Procter & Gamble on my watchlist? If we have a look at the weekly chart, we can see steady upward movement without too much volatility. The moving averages are in the correct order (I am neglecting the 200 period MA for now, as this will most likely be in the correct order by the time my potential trade sets up). Price is currently very close to the buy zone on the weekly chart and the MACD and RSI indicators are convergent.

20160412 twp3

So do we have a perfect setup here? Not yet, looking at both MACD and RSI we can see they are trending mostly sideways without too much loss of momentum. For the last few days both indicators have started to diverge more clearly. Once price approaches the breakout level, I will keep a close eye on these indicators and will make a judgement call if I see sufficient indicator momentum confirming the breakout. As yet I have not set my entry as I want to monitor this chart over the next few days to see if price sets up according to my rules.

If the trade does set up, then I would plan for my entry to be above the flat level (approx. 83.92). There are two obvious choices for a stop-loss location, one would be around 81.88 which is below the swing low on April 1st and the other would be below the swing low on March 16th. I like the second option better as there is also a horizontal level there, which could add further protection for the stop.

This is my plan for Procter & Gamble, in my opinion it could provide a solid trade based on my rules. Please feel free to keep an eye on it too, and remember to always do your own analysis and pan your trade sin accordance with your own trading rules.