GIS unable to break through key resistance level
General Mills Inc. (GIS) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, GIS ended the month 2.63% higher at 63.27 after losing $0.21 (-0.33%) today on high volume, significantly underperforming the S&P 500 (0.77%). Today's close at 63.27 marks the lowest recorded closing price since July 9th. Trading up to $0.71 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 July 22nd, GIS gained 0.42% on the following trading day. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (GIS as at Jul 31, 2020):
Friday's trading range has been $1.53 (2.43%), that's far above the last trading month's daily average range of $1.08. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for GIS.
Two candlestick patterns are matching today's price action, the Bullish High-Wave Candle and the Bullish Spinning Top which are both known as bullish patterns.
Unable to break through the key technical resistance level at 63.30 (R1), the stock closed below it after spiking up to 63.89 earlier during the day. The failure to close above the resistance might increase that levels importance going forward.
While the share is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "3 Consecutive Lower Closes" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for General Mills. Out of 133 times, GIS closed higher 57.89% 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 59.40% with an average market move of 0.48%.