GIS closes above its opening price after recovering from early selling pressure
General Mills Inc. (GIS) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
GIS ended the week -4.05% lower at 59.96 after edging higher $0.01 (0.02%) today on low volume, slightly underperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Trading up to $0.31 lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on May 8th, GIS gained 1.76% on the following trading day. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (GIS as at May 22, 2020):
Friday's trading range has been $0.56 (0.94%), that's far below the last trading month's daily average range of $1.35. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for GIS.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar.
After trading down to 59.48 earlier during the day, the stock bounced off the key technical support level at 59.51 (S1). The failure to close below the support could increase that levels significance as support going forward. After having been unable to move lower than 59.39 in the prior session, General Mills found buyers again around the same price level today at 59.48.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Selling might speed up should prices move below the nearby swing low at 59.39 where further sell stops could get activated. As prices are trading close to May's low at 58.48, downside momentum might accelerate should the share mark new lows for the month.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Its common bullish interpretation has been confirmed for General Mills. Out of 458 times, GIS closed higher 56.99% 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 55.90% with an average market move of 0.36%.