Conclusion, Investment Implications, Strategy
PPG Industries, Inc. (PPG) is currently testing minor underlying support near $111.14 amid favorable conditions to resume its August major uptrend and coincident trend of Strategic relaltive outperformance versus the benchmark S&P 500.
Analysis and Rationale
PPG Industries, Inc. (PPG) manufactures and distributes paints, coatings, and specialty materials worldwide. The company was founded in 1883 and is headquartered in Pittsburgh, Pennsylvania. This sets up a relatively low-risk / high-reward opportunity to enter PPG near the beginning of its next potential leg higher.
The upper panel of Chart 1 below plots PPG daily since July in the upper panel along with its 200- and 50-day day moving averages, widely-watched major and minor trend proxies. In the lower panel, there is an accompanying chart of PPG’s relative performance versus the S&P 500 (SPX) and its 63-day (quarterly, our Strategic time frame) moving average.
The green dashed vertical line across both panels show that PPG rose above its 200-day MA on Aug 10th to signal a major bullish trend change while it simultaneously began a trend of quarterly relative outperformance versus SPX. The rightmost green highlights show that PPG is currently testing minor support at its 50-day MA, currently at $111.14, while also testing and holding its trend of quarterly relative outperformance versus SPX.
This sets up a relatively low-risk, high-reward opportunity to enter PPG near the beginning of its next potential leg higher.
Chart 1
Table 1 below shows that considering the upside target of $160.00 and a protective stop placed below the $141.37 area, a long entry price of $145.56 would provide a 1:3.4 risk/reward ratio (risking $1.00 to make $3.40) with an initial risk of 2.9%.
Table 1
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Please consult the table showing our Asbury 6 key market metrics to help determine if this investment is suitable for you.