Shares of The Procter & Gamble Company (NYSE:PG) are trading higher Tuesday. This could be the beginning of a new uptrend.

The stock is currently at support and oversold, which historically signals the potential for a rally. That’s why our team of experts has chosen it as our Stock of the Day.

As you can see on the chart, $159.20 has been support for Proctor and Gamble. When the stock dropped to this level in late July a rally followed. The same thing happened at the end of November. Now it has reached this level again.

Support is a large concentration of investors and traders who are looking to buy shares at or close to the same price. Stocks often rally after they reach support.

This happens when some who wish to buy become concerned others may outbid them. They know people who wish to sell will go to whoever is willing to pay the highest price.

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So, these concerned buyers increase the prices they are willing to pay for their shares. Other concerned buyers see this and do the same thing. This results in a bidding war or snowball effect that can force the price higher.

P&G is also very oversold.

The red line on the chart is called a Bollinger Band. It is two standard deviations below the 20-day moving average price. Statistics and probability theory suggest that 95% of trading should take place within these two standard deviations.

If this threshold is exceeded to the downside, it will draw buyers into the market. They will be expecting a revision to the mean or a move higher. Their buying could move the price higher. As you can see, this has happened before.

Shares of Procter & Gamble are oversold and at support, conditions that could trigger a move higher and potentially start a new uptrend.

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