GIS finds buyers again around 52.75
General Mills Inc. (GIS) Technical Analysis Report for Jul 16, 2019 | by Techniquant Editorial Team
Moving lower for the 4th day in a row, GIS finished Tuesday at 52.86 losing $0.26 (-0.49%), slightly underperforming the S&P 500 (-0.34%). Trading $0.42 higher after the open, the stock was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (GIS as at Jul 16, 2019):
Tuesday's trading range has been $0.63 (1.19%), that's below the last trading month's daily average range of $1.11. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for GIS.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. Additionally, one bearish candlestick pattern matches today's price action, the Bearish Spinning Top.
After trading down to 52.75 earlier during the day, the market bounced off the key technical support level at 52.82 (S1). The failure to close below the support could increase that levels importance as support going forward. Prices are trading close to the key technical resistance level at 53.64 (R1). After having been unable to move lower than 52.63 in the previous session, General Mills found buyers again around the same price level today at 52.75. The last time this happened on May 31st, GIS gained 2.43% on the following trading day.
Although the share is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Buying could accelerate should prices move above the nearby swing high at 53.87 where further buy stops might get activated. Selling could speed up should prices move below the close-by swing low at 52.63 where further sell stops might get triggered.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "4 Consecutive Lower Closes" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for General Mills. Out of 54 times, GIS closed higher 66.67% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 55.56% with an average market move of 0.24%.