A key resistance level has formed in the chart of Newell Brands (NWL). If the stock breaches this level, a breakout could occur.
NWL is an American global consumer goods company. It sells products in the following segments, Appliances and Cookware, Food and Commercial, Home and Outdoor Living and Learning and Development.
The company has performed well during the pandemic. NWL is seeing strong growth across business segments through its e-commerce platform. In its most recent financial results, management was expecting a strong fourth quarter and full fiscal 2020.
As of the end of the last quarter, the company had $4.7 billion in cash, up from the preceding quarter, but lower than its $6.3 billion in long-term debt. Though, the company has a current ratio of 1.5, indicating healthy short-term liquidity.
Earnings are expected to be up 11.9% for the current quarter and 33.3% next year. The stock appears undervalued with a forward P/E of 12.35. NWL has shown strong near and long-term momentum, leading to a “Strong Buy” rating in our POWR Ratings service.
Take a look at the 1-year chart of NWL below with added notations:
For most of the past year, NWL has been on a continual trend higher, with the usual pullbacks along the way. Twice now it has hit the $22 level (red) as resistance, which is also the new 52-week high barrier. A break of that $22 mark most likely means another long leg higher for NWL.
The possible long position on the stock would be on a breakout above that level with a protective stop placed under it.
Want to Discover More Great Trades?
I have explored virtually every flavor of technical analysis and chart pattern known to mankind. The sad fact is that the vast majority of them don’t work at all.
That is why I recently put together this special report to help investors focus on the only 5 chart patterns that matter…the ones that lead to the most timely and profitable stock trades. Click below to get your copy now!
5 WINNING Stock Chart Patterns
Have a good trading day!
Good luck!
Christian Tharp, CMT
NWL shares were trading at $22.21 per share on Wednesday morning, up $0.35 (+1.60%). Year-to-date, NWL has gained 4.62%, versus a -0.53% rise in the benchmark S&P 500 index during the same period.
About the Author: Christian Tharp, CMT
Christian is an expert stock market coach at the Adam Mesh Trading Group who has mentored more than 4,000 traders and investors. He is a professional technical analyst that is a certified Chartered Market Technician (CMT), which is a designation awarded by the CMT Association. Christian is also the author of the daily online newsletter Todays Big Stock.
The post A Potential Breakout is in the Charts for Newell Brands appeared first on StockNews.com