Member Request: A Look at $CHD

A member has requested a look at $CHD. I have a few thoughts I can post.

Now, on a glance at the monthly chart, it’s just a straight line up:

CHD

There could be a 1-2 in there in the eighties, I’m not even sure because if there is one in there, it’s not very big in terms of time or price. Just a multi-decade, almost continuous markup. Amazing, really. And perhaps we’re in a long 3rd-wave markup now, or for all we know, we’re still in the first wave. There’s just not much structure here to deal with. But it certainly looks impulsive, just because of the momentum. Hard to argue against that.

And so looking in closer at the price action since the COVID crash, we may also want to try to label it as an impulse (since the long-term chart looks so impulsive), with September of last year being a primary (pink) 1, and the decline from there as a primary (pink) 2. But I detect a problem with that almost immediately. The only way I can really reliably label the move from the COVID lows to the September of 2020 high as an impulse is as I’ve labeled it here, with 5 intermediate (orange) internal waves. But this involves a rule violation, as wave 3 would then be the shortest wave, and that is not allowed.

CHD

And so, perhaps like many of the indices, it should also be counted as a correction. And if so, I think I would sort of try something like this:

CHD

And yet, this doesn’t entirely agree with the everything rally I am expecting, and so my inclination above could be completely wrong. Counting complicated corrections like this one—if it is in fact one—is fraught with peril and uncertainty. If we sort of ignore the complexity from September to September and wave our hands over that, we could also give it a more immediately bullish look by doing this (though I am a bit more skeptical of this count):

CHD

In either case, I suspect it will rally at least eventually to the $131 area—if not even more. There’s nothing stopping primary pink C from exceeding a 1:1 relationship with primary pink A. The big trick here is trying to figure out if it’s going to pullback from here before doing that and I am unsure about that, though I lean to the view that it will.


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