General Mills, Inc. (NYSE: GIS) shows signs of an upcoming price surge according to its latest charts. The company manufactures and markets branded consumer foods worldwide. GIS offers ready-to-eat cereals, refrigerated yogurt, soup, meal kits, refrigerated and frozen dough products, dessert and baking mixes, bakery flour, frozen pizza, and pizza snacks, snack bars, fruit, and salty snacks, ice cream, nutrition bars, wellness beverages, and savory and grain snacks, as well as various organic products.
Bullish Indications
#1 Downtrend Channel: The daily chart shows that the stock was forming a downtrend channel during the past several months. This is marked in purple color in the daily chart below. The stock had typically taken support at the bottom of the channel before bouncing back. The stock currently looks poised for a breakout, indicating bullishness.
GIS – Daily Chart
#2 Above MA: The stock is currently trading above its 50-day SMA and has been moving higher with high volume. This indicates an overall bullishness of the stock.
#3 Bullish ADX and DI: The ADX indicator shows bullishness because the +DI line has crossed above the -DI line and the ADX line is currently starting to move higher from below the +DI and -DI lines.
#4 Bullish Stoch: The %K line is above the %D line of the stochastic in the daily chart, indicating possible bullishness.
#5 MACD above Signal Line: As you can see from the daily chart, the MACD line (blue color) has currently crossed above the signal line (orange color). This indicates a possible bullish bias.
#6 Trendline Support: The stock is currently moving higher after taking support at the uptrend line, which is marked as a pink color dotted line. This is a possible bullish sign.
#7 Bullish Stoch: The %K line is above the %D line of the stochastic in the weekly chart as well. It is also moving higher from oversold levels, indicating possible bullishness.
GIS – Weekly Chart
#8 Bullish RSI: The RSI is currently near 50 and moving higher, indicating the strength of the current upmove.
Recommended Trade (based on the charts)
Buy Price: If you want to get in on this trade, the ideal buy level for GIS is above the price of $61.00.
TP: Our target prices are $65 and $70 in the next 2-5 months.
SL: To limit risk, place a stop loss below $58.50. Note that this stop loss is on a closing basis.
Our target potential upside is almost 7% to 15% in the next 2-5 months.
For a risk of $2.50, our target rewards are $4.00 and $9.00. This is almost 1:2 and 1:4 risk-reward trade.
In other words, this trade offers nearly 2x to 4x more potential upside than downside.
Risks to Consider
The stock may reverse its overall trend if it breaks down with high volume from the trendline support and the downtrend channel. The sell-off of the stock could also be triggered in case of any negative news, overall weakness in the market, or any regulatory changes in the sector.
Happy Trading!
— Tara
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