We took the charts of General Mills, Inc. (GIS) off the shelf in October and commented that, "The $49-$42 area shows a decent amount of volume, so I would consider a support area until proven otherwise. GIS is still in a downtrend and the pace of the decline has not slowed. I still do not find any compelling technical reasons to approach GIS from the long side."
Now that GIS is at the bottom of the $49-$42 area a fresh look at the charts and indicators is needed.
In this updated daily bar chart of GIS, below, we can see a mixed picture. Prices are still in a downtrend from late January but have not made a new low recently. The 50-day moving average line has a bearish slope as does the 200-day line.
The daily On-Balance-Volume (OBV) line turned down in early February and has moved lower but the pace of the decline looks like it has slowed this month.
In the bottom panel of this chart is the 12-day price momentum study which slows a slowing of the decline from late March to May while prices continued to make lower lows. This is a bullish divergence and might foreshadow some price recovery in the weeks ahead.
In this weekly bar chart of GIS, below, we have a mixed picture. Prices are below the declining 40-week moving average line.
The weekly OBV line has been steady the past five weeks or so despite prices continuing to make new lows.
The trend-following Moving Average Convergence Divergence (MACD) oscillator is way down in bearish territory but it has begun to narrow towards a possible cover shorts buy signal.
In this Point and Figure chart of GIS, below, we can see the long decline in price. A $44.68 price target has been met. A rally to $44.83 will start to improve the chart.
Bottom line: GIS looks poised for some price recovery - perhaps a rally to the $46-$48 area in the next few weeks. This will be part of a basing pattern.