Colgate-Palmolive Stock [CL] Corrected Lower – Is It a Buy?

Colgate-Palmolive Stock [CL] Corrected Lower – Is It a Buy?

 Published: September 21st, 2021

Dividend stocks like Colgate-Palmolive is an attractive investment opportunity where people can earn a decent profit over time as a passive income. In particular, Colgate-Palmolive has some consumer materials that people use in their day-to-day activities. As a result, even if the price becomes high, people will not think twice before buying those.

In that case, CL always has room to boost the revenue from the price increase. On the other hand, its long history of providing dividends is also supportive for investors. In the last three years, the company showed revenue of more than $17 billion with a surge in sales growth of 2% a year. On the other hand, its steady stream of cash helped to keep the business stable over the last few years.

The dividend payout ratio remains stable above the 50% level, pointing out that investors have more room to see the 3% increment of revenue decided by the management. On the other hand, the short-term liquidity and gearing remained stable for the company. As of the latest financial statement, most of the liquid money was spent on financing activities, and investors may experience its effect on the price soon.

Let’s see the upcoming price direction from the Colgate-Palmolive Stock [CL] technical analysis:

Colgate-Palmolive Stock [CL] Daily Chart

Colgate-Palmolive Stock Daily Technical Analysis 21 September 2021

Colgate-Palmolive Stock [CL] remained within a bullish continuation pattern since the beginning of 2021, where the price bottomed at 74.20 before moving to the 84.97 swing high. Later on, the price corrected lower and moved below the 80.00 event level with a bearish gap. Although the price is now trading just above the 74.20 support level, it did not fill the gap.

In the daily chart, we can see that the CL stock is trading below the dynamic 20 EMA, where the price is facing a corrective momentum due to the profit-taking of sellers. Moreover, the price formed a hidden divergence with MACD Histogram where the price made new lows, but the Histogram made highs.

In March 2021, Bulls showed a strong interest in the price by making the 74.20 to 76.50 area a strong demand zone. Therefore, now investors should see how the price reacts in this area as it is revisiting the area for the first time.

Colgate-Palmolive Stock [CL] H4 Chart

Colgate-Palmolive Stock H4 Technical Analysis 21 September 2021

According to the Ichimoku Kinko Hyo, CL stock moved below the Kumo Cloud by making the market sentiment bearish with a strong gap. As a result, the price moved lower by making several lower lows while dynamic Tenkan Sen and Kijun Sen are resisting.

In the future cloud, Senkou Span is still below the Senkou Span B and aiming lower. In that case, still, there is no sign of bulls as the dynamic Tenkan Sen is moving below the Kijun Sen line. In the indicator window, RSI reached the oversold 30 level, where any rebound in the price is possible if the RSI moves above the 40 levels with a bullish crossover in the dynamic line.

Colgate-Palmolive Stock [CL] H1 Chart

Colgate-Palmolive Stock H1 Technical Analysis 21 September 2021

In the intraday chart, CL stock is trading within a strong bearish trend where the price broke below the 77.00 event level with a massive H1 close and retest. As a result, the price made a new intraday low at 75.70 level and closed the day with a bullish correction.

In the above image, we can see that the price is trading below the intraday high volume level of 76.46 while the dynamic 20 EMA and weekly vwap are working as minor resistance. Therefore, as long as the price is trading below the 76.46 level, it is more likely to extend the bearish pressure in the coming session.

However, bulls should closely focus on how the price is reacting at the 77.00 event level. As the price has found the higher timeframe’s demand zone, any sign of intraday higher highs will be potential for upcoming bullish pressure. On the other hand, as the current price is still below the 77.00 level, we may expect to expand the current trend towards the 75.00 level.

Should You Try Buying Colgate-Palmolive Stock [CL]?

As of the above discussion, we can say that the Colgate-Palmolive Stock [CL] may correct lower until the intraday price finds a new swing high. Moreover, a bearish H4 close below the 74.20 support level may extend the bearish pressure towards 60.84 area. On the other hand, investors should closely monitor how the price reacts between 74.20 to 76.50 demand area. Any strong bullish H4 close above the dynamic Kijun Sen may begin a new uptrend.

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