{"id":21917,"date":"2024-06-24T07:30:25","date_gmt":"2024-06-24T11:30:25","guid":{"rendered":"https:\/\/www.jeffclarktrader.com\/?p=21917"},"modified":"2024-06-24T07:30:25","modified_gmt":"2024-06-24T11:30:25","slug":"this-boring-household-staple-may-be-a-hidden-gem","status":"publish","type":"post","link":"https:\/\/stage.jeffclarktrader.com\/market-minute\/this-boring-household-staple-may-be-a-hidden-gem\/","title":{"rendered":"This Boring Household Staple May Be a Hidden Gem"},"content":{"rendered":"

Managing Editor’s Note:<\/strong> Today, we’re handing the reins over to colleague Larry Benedict – a market wizard and legendary hedge fund manager.<\/p>\n

In this essay, he’ll share his findings about a company that may not be a buzzworthy name but has the potential for great gains by the year’s end.<\/p>\n

Here’s Larry…<\/p>\n

\n

Few things are certain in life – death and taxes often come to mind.<\/p>\n

In the current era, you may want to add to that list “tech stocks driving the market higher.”<\/p>\n

So far this year, the technology sector is up 20%. The communications sector, filled with Meta, Alphabet, and Netflix, is up 16%.<\/p>\n

These are the only two sectors that have outperformed the S&P 500’s gain of 15%. <\/p>\n

The strength of these two sectors has allowed the S&P 500 to notch its 30th all-time high so far this year. That’s well above the average of 19 all-time highs a year over the past 50 years.<\/p>\n

But the overconcentration of tech stocks in the market’s gains leaves investors vulnerable.<\/p>\n

We can tell this by looking at the Relative Strength Index (RSI).<\/p>\n

When the RSI rises above 70, the stock may be overbought, and a price correction could be imminent.<\/p>\n

When the RSI is below 30, the stock may be oversold, and a price increase could be coming.<\/p>\n

Currently, the S&P 500’s RSI is 76, which signifies overbought conditions.<\/p>\n

The tech-heavy Nasdaq 100 sits at an RSI of 82, the highest level it has reached in six years.<\/p>\n

In these overstretched conditions, you should consider digging into other areas of the market to find bargains.<\/p>\n

There are tons of attractive setups across different sectors that may catch up to the market by year-end.<\/p>\n

So let’s take a look at a name that has just broken out of a monthlong consolidation. It’s showing all the signs of a stock that’s heading higher.<\/p>\n

It’s a boring household staple. But the setup is very exciting…<\/p>\n

This Boring Name Could Attract a Lot of Buzz<\/h2>\n

Colgate-Palmolive (CL)<\/strong> is a juggernaut in the household and personal care products industry.<\/p>\n

You likely have a few of its products tucked away in your kitchen or bathroom right now.<\/p>\n

The stock has had a great year so far, rising by 20%.<\/p>\n

Over the past few weeks, though, it has taken a healthy breather. Yet now signs are telling us that there’s still life in this stock.<\/p>\n

You can see what I mean in the chart below:<\/p>\n

\"chart\"<\/p>\n

(Click here to expand image)<\/a><\/p>\n

CL has broken out of a monthlong consolidation.<\/p>\n

As you can see, the price of CL has risen above the purple line. That line previously served as a resistance level.<\/p>\n

And two classic signals should pique your interest. They could signal more gains to come…<\/p>\n

The first is in the moving average convergence\/divergence (MACD) section in the middle of the chart.<\/p>\n

The MACD line is a momentum indicator. When it crosses above the orange signal line, it’s a bullish signal.<\/p>\n

That signal is even stronger due to its position well above the zero line. That confirms the stock is in an upward trend.<\/p>\n

The second indicator to watch is the RSI at the bottom of the chart. RSI measures the speed and strength of price movements.<\/p>\n

Remember, as I mentioned above, an RSI above 70 suggests a stock could be overbought. And an RSI below 30 hints that the stock could be oversold.<\/p>\n

CL’s RSI is currently 66, which means it’s in a sweet spot – above 50 but not yet overbought.<\/p>\n

So momentum is strong, but CL isn’t yet at a point where we need to worry about a pullback.<\/p>\n

The last time CL broke out of a monthlong base with a bullish MACD and RSI was in late January of this year.<\/p>\n

Following the breakout, the stock rose by 5% over the span of five days.<\/p>\n

It then went on to rise an additional 6% over the following two months.<\/p>\n

So we’re looking at a prime setup for this stock to continue rising.<\/p>\n\n\n\n
\n

Free Trading Resources<\/strong><\/p>\n

Have you checked out Jeff’s free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career \u2013 at zero cost to you. Just click here<\/a> to check it out.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

All-Around Strength<\/h2>\n

Outside of its technical attractiveness, Colgate has strong fundamentals. That should only add to our confidence in this name.<\/p>\n

On April 26, the company reported Q1 earnings results that blew analyst forecasts out of the water.<\/p>\n

It sold 1.3% more products than a year ago – even with a 9% increase in the average price per product.<\/p>\n

Colgate is actively proving that its products remain in heavy demand. And consumers aren’t turning away from them in the face of price hikes.<\/p>\n

The strength of its Q1 results led the company to raise its 2024 sales forecast by 2 percentage points.<\/p>\n

Ultimately, Colgate is benefiting from continued consumer demand. And its stock is looking set to rally further.<\/p>\n

If you’re looking for a call option trade, CL could be a triple-digit winner if this setup plays out.<\/p>\n

Regards,<\/p>\n

Larry Benedict
Editor, Trading With Larry Benedict<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

In these stretched conditions, consider digging into other areas of the market to find bargains\u2026<\/p>\n","protected":false},"author":61,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"ep_exclude_from_search":false,"service":"","footnotes":""},"categories":[1],"tags":[],"publication":[10],"person":[58],"newsletter-type":[],"ticker":[],"class_list":["post-21917","post","type-post","status-publish","format-standard","hentry","category-uncategorized","publication-market-minute","person-larry-benedict"],"acf":[],"ai_tts_audio_outdated":false,"ai_tts_legacy_post":false,"_links":{"self":[{"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/21917","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/users\/61"}],"replies":[{"embeddable":true,"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/comments?post=21917"}],"version-history":[{"count":0,"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/21917\/revisions"}],"wp:attachment":[{"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=21917"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=21917"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=21917"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=21917"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=21917"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=21917"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=21917"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}