Proctor & Gamble Stock Support in Place

PG is headed towards the $140 level

Apr 21, 2020 at 2:17 PM
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Consumer products staple Procter & Gamble Co (NYSE:PG) is fresh off an upbeat post-earnings reaction from Friday. In addition to the shares coming off a $300 billion market cap near the $121 level, earlier in the week PG broke out of a trendline connecting lower highs since late February. In other words, the blue chip has support in place to keep chugging toward the $140 level, which is conveniently double its 2018 lows.

WKALT Stock Chart PG


There's room for more bullish analyst attention that could vault PG higher. Of the 21 brokerages covering the stock, 13 rate it a "buy" or better. However, 10 gave it such a rating three months ago, indicating this "buy" cycle analysts are in doesn't appear to be running out of steam anytime soon.

In the options pits, there is a large amount of call open interest stacked up at $130 in the May series that can help act as an options-related magnet in the next month or so. Plus, options are relatively cheap right now. PG's Schaeffer's Volatility Index (SVI) of 34% sits lower than all but 30% of readings from the past year, implying that near-term options traders are pricing in low volatility expectations right now.

Our recommended call option has a leverage ratio of 8.1 and will double on a 12.3% rise in the underlying stock.

Subscribers to Schaeffer's Weekend Trader options recommendation service received this PG commentary on Sunday night, along with a detailed options trade recommendation -- including complete entry and exit parameters. Learn more about why Weekend Trader is one of our most popular options trading services.


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