Back on February 4th shares of Clorox exploded to the upside following very solid Q2 earnings report. CLX finished the session with a 5.6% gain on its heaviest volume in over a year. This was the stock’s best single day gain since a powerful earnings driven breakout back on August 2nd of last year.
Clorox has been consolidating in a narrowing range since the Feb. 4th ramp. During this phase the stock has been unable to move past heavy resistance near $160.00. We believe this zone is beginning to soften up. Once the Feb. 4 highs($161.35) are convincingly taken out CLX will be set up well for a run up to the 2018 peak.
CLX should be regarded as a fairly low risk buy near current levels. On the downside, a close back below $155.00 would violate the March lows sending a clear warning sign that the resistance area near $160.00 remains in control.
At time of publication we are long CLX in some managed accounts.