Church & Dwight reported earnings this last week.
Finally, shares of Church & Dwight fell 7.5%. The maker of consumer brand products like Arm & Hammer, Oxiclean, and Waterpik said that sales grew more than 4% in the fourth quarter of 2018 on an organic basis, with especially strong 9% gains internationally.
Yet even though results in the consumer international and consumer domestic segments were solid, Church & Dwight saw a big drop in net sales of specialty products. Moreover, investors were concerned about the impact of tariffs, which was a significant cause of a 2.5-percentage-point drop in gross margin to just over 44%. Even a 5% dividend increase didn’t satisfy investors, as less extensive growth in the fourth quarter and weaker guidance for the current quarter were enough to reverse gains in the stock price late last year.
But what I want to bring to your attention is the reversal pattern on the chart.
Do you see it?
What about now?
OK, let me draw it out.
I was introduced to “M” (and “w”) patterns several months ago and based on my assessment, boy do they work. And when you get this type of pattern on a higher time frame chart, boy….look out.
NOTE: Double tops and bottoms are reversal patterns. A double top (“M” pattern) forms when the price makes a high within an uptrend, and then pulls back. On the next rally the price peaks near the prior high, resistance and then falls below the pullback low.
Thus, the chart suggest price is heading lower. I don’t see any entries to short the stock at the moment, but the chart suggest price is heading down to the weekly demand at $54.
This post is my personal opinion. I’m not a financial
advisor, this isn’t financial advise. Do your own research before making