GIS dominated by bears dragging the market lower throughout the day
General Mills Inc. (GIS) Technical Analysis Report for Aug 23, 2019 | by Techniquant Editorial Team
GIS ended the week -2.53% lower at 53.63 after tanking $1.05 (-1.92%) today on low volume, but still outperforming the S&P 500 (-2.59%). This is the biggest single-day loss in over a month. The last time we've seen such an unusually strong single-day loss on June 26th, GIS actually gained 1.77% on the following trading day. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 54.22, the share confirmed its breakout through the previous session low after trading up to $0.85 below it intraday.
Daily Candlestick Chart (GIS as at Aug 23, 2019):
Friday's trading range has been $1.45 (2.65%), that's above the last trading month's daily average range of $1.04. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for GIS.
In spite of a strong opening General Mills closed below the prior day's open and close, forming a bearish Engulfing Candle. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
After trading as low as 53.37 during the day, the stock found support at the 50-day moving average at 53.52. The market closed below the 20-day moving average at 53.92 for the first time since August 7th. GIS ran into sellers again today around 54.82 for the third trading day in a row after having found sellers at 54.83 in the previous session and at 54.84 two days ago.
Though 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.
Among the 14 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Strong Down Move" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for General Mills. Out of 192 times, GIS closed higher 55.21% 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 66.67% with an average market move of 0.91%.