Procter & Gamble (NYSE: PG) announced its withdrawal from the Russian market. The decision may not be agreeable to conscious investors.
PG is discontinuing all capital investments and promotional activities in Russia. It will also reduce its product portfolio to maintain only very basic health, hygiene and personal care products.
Investors believe that PG's response may not be enough to deal with Russia's invasion of Ukraine, so the stock is selling off.
While PG notes that it will continue to adjust as needed, further action in line with sanctions and investor expectations will not bring the stock back up. However, these events provide technical trading opportunities for investors to watch.
PG's stock expected to plunge to $125
Source – TradingView
PG fell from $154 to $144 this week. The stock is just gaining momentum in a downtrend. MACD is sending a double signal to sell the stock. The RSI has fallen from 70 a month ago to the current 40 indicating a downward spiral in the stock.
The analysis keenly points out that the RSI's SMA 14 at 66 is still signaling an overbought stock. The huge divergence from 66 to 40 points suggests that the stock will fall further before the trend reverses.
We think PG will test the oversold RSI 30 indicator before moving up. This will happen at a price close to $125.
PG's response to the Russian sanctions will cause the stock price to plummet. However, full compliance with sanctions will not bring stocks back up. When stocks bottom out, investors can still learn to open positions from technical analysis.
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