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Clorox Is Still Poised to Move Higher

Company is set to report its latest quarterly results Tuesday.
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Clorox Inc. (CLX) is due to report its earnings figures Tuesday. Let's check out the charts to see how traders may have positioned themselves.

The last time we looked at CLX was back on Jan. 28, but we caught the bottom back on Nov. 25. Let's check the charts again on this  Action Alerts PLUS holding.  

In the daily bar chart of CLX, below, we can see how prices rallied from support around $144 to the underside of resistance beginning around $162. Prices rallied above the rising 50-day moving average in December and above the bottoming 200-day moving average line in early January.

The On-Balance-Line (OBV) line turned higher in November and tells us that buyers of CLX have been more aggressive. The OBV line has not turned lower as prices declined in late January.

The Moving Average Convergence Divergence (MACD) oscillator moved above the zero line for a buy signal back in December and now crossed to a take profits sell signal. Renewed price gains from here could produce another buy signal in the days ahead.  

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In the weekly bar chart of CLX, below, we can see that prices are above the bottoming 40-week moving average line. Prices got close to the top end of large sideways consolidation pattern but a breakout has so far eluded investors and traders.

The weekly OBV line is steady and close to a making a new high for the move up. The MACD oscillator is inching its way above the zero line and an outright go long signal. 

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In this Point and Figure chart of CLX, below, a potential upside price story of $194 is indicated but a trade at $165.07 is needed for a new high for the move up and a breakout from the consolidation pattern. 

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Bottom-line strategy: I have no idea whether CLX will move higher after its earnings report or from coronavirus-linked buying. Either way, though, aggressive traders could continue to approach the long side of CLX risking a close below $153.

(Clorox is a holding in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells CLX? Learn more now.)

Employees of TheStreet are prohibited from trading individual securities.

Action Alerts PLUS, which Cramer manages as a charitable trust, is long CLX.