GIS pushes through key technical resistance level
General Mills Inc. (GIS) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
GIS ended Thursday at 50.00 gaining $2.35 (4.93%) on low volume, notably underperforming the S&P 500 (6.24%). The bulls were in full control today, moving the market higher throughout the whole session. Closing above Wednesday's high at 49.20, General Mills confirmed its breakout through the previous session high after trading up to $1.30 above it intraday.
Daily Candlestick Chart (GIS as at Mar 26, 2020):
Thursday's trading range has been $3.12 (6.53%), that's slightly below the last trading month's daily average range of $3.63. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently significantly higher than usual for GIS. Prices continued to consolidate within a tight trading range between 46.95 and 50.50 where it has been caught now for the last three trading days.
One bullish candlestick pattern matches today's price action, the White Candle.
Buyers managed to take out the key technical resistance level at 48.75 (now S1), which is likely to act as support going forward. The last time this happened on March 17th, GIS actually lost -3.22% on the following trading day. Prices are trading close to the key technical resistance level at 52.52 (R1). The share was bought again around 47.38 after having seen lows at 46.95, 47.11 and 46.88 in the last three trading sessions. Obviously there is something going on at that level.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
With prices trading close to this year's low at 46.59, downside momentum could speed up should the market break out to new lows for the year.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to prior three Lows" stand out. Its common bullish interpretation has been confirmed for General Mills. Out of 14 times, GIS closed higher 78.57% 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 64.29% with an average market move of 1.27%.