GIS still stuck within tight trading range
General Mills Inc. (GIS) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
GIS ended Wednesday at 58.75 losing $0.27 (-0.46%), performing in line with the S&P 500 (-0.46%). Trading $0.35 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 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 Sep 16, 2020):
Wednesday's trading range has been $0.87 (1.47%), that's below the last trading month's daily average range of $1.35. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for GIS. Prices continued to consolidate within a tight trading range between 57.84 and 60.13 where it has been caught now for the whole last trading week.
Two candlestick patterns are matching today's price action, the Last Engulfing Bottom Pattern which is known as bullish pattern and one bearish pattern, the Black Candle. The last time a Last Engulfing Bottom Pattern showed up on June 26th, GIS gained 2.58% on the following trading day.
Prices are trading close to the key technical support level at 58.25 (S1). Unable to break through the key technical resistance level at 59.41 (R1), General Mills closed below it after spiking up to 59.54 earlier during the day. The failure to close above the resistance might increase that levels significance going forward. The market ran into sellers again today around 59.54 for the third trading day in a row after having found sellers at 59.49 in the previous session and at 59.64 two days ago.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Buying could speed up should prices move above the nearby swing high at 59.64 where further buy stops might get activated. Selling could accelerate should prices move below the close-by swing low at 58.25 where further sell stops might get triggered.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Black Candle" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for General Mills. Out of 488 times, GIS closed higher 55.94% 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 60.66% with an average market move of 0.50%.