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Asset Watch
Tuesday, July 11, 2023
With an uprising in bond yields creating some angst among investors, the S&P 500 recorded another weekly decline. Yet, while the index’s drawdown has been relatively mild, individual stocks have felt more pain.
General Mills ended the Jul. 7 session down by 17% from its 2023 closing high. And with prior pullbacks creating opportunities for the optimists, could the Cheerios maker reward the bulls once again?
General Mills has been in a long-term uptrend since late 2018, as higher highs and higher lows have been present for most of the run. The consumer foods giant’s 100-week moving average has acted as reliable support and resistance. In early 2018, a rally ended near the 100-week MA, and after a breakout in March 2019, it’s been a key support level. With the milestone only 1.96% below the Jul. 7 close, we could soon witness another iteration.
On top of that, the multinational food manufacturer’s rising support line drawn from the 2018 lows (the grey line) has been another source of support throughout the uptrend, and it almost perfectly aligns with the 100-week MA.
Finally, General Mills’ weekly RSI (the black line at the bottom) has fallen to its lowest level since the 2018 nadir. Because of this, the stock hasn’t been more oversold on a weekly basis in more than four years.
So, is it time to munch on General Mills, or is the stock approaching its expiration date?
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