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Consumer Staple Improving Margins Sets up Bull Wedge Breakout

by | Aug 15, 2024

Kimberly Clark (KMB) with the market a bit short term extended its tougher to find new setups in higher beta names so there is potential to see some rotation for a few days and perhaps the staples names get a bounce. KMB is showing great relative strength with the group and held its 55-day MA this past week while coiling in this wedge near highs. A bullish MACD crossed higher Thursday, and the lower beta name can see a break above 142 for a move to a new high north of 146 with an eventual target up at 150 likely in the coming month. If inclined to use options, then a name like this has cheap IV and something like the September $140 calls at $3.40 can see a quick 50-75% gain if the stock just retested 145.

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