General Mills Inc. (GIS) was reviewed one month ago, and I wrote that "GIS looks like it made a temporary bounce and should retest the May lows. I do not see any technical reasons for these lows to hold so traders should be prepared for the possibility that new lows could be made." Looking back on a chart this morning I can see (below) that prices weakened into late July but stopped short of the May lows. This looks like a successful "retest" as prices have rallied above their June highs. Let's go down the supermarket aisle and look at the charts and indicators again.
In this daily bar chart of GIS, below, we can see that prices temporarily broke below the 50-day moving average line in July but are now above the rising line telling us that the short-term trend is up. The declining 200-day moving average line intersects above the market just below $50. The daily On-Balance-Volume (OBV) line has been moving up from early June. This tells us that some buyers of GIS have become more aggressive. The daily Moving Average Convergence Divergence (MACD) oscillator is pointed up from above the zero line -- a bullish configuration.
In this weekly bar chart of GIS, below, we can see a mixed technical picture. Prices are below the declining 40-week moving average line. The weekly OBV line shows an uptick in July but is still in a weakening pattern from January. The weekly MACD oscillator shows a cover shorts buy signal in June.
In this Point and Figure chart of GIS, below, we can see an upside price target of $52.68.
Bottom line: The charts and indicators of GIS have improved the past month or so. GIS could rally further in the short-run but a stronger advance could happen if GIS trades sideways for a few more weeks. Risking just below $42, traders could slowly probe the long side of GIS on dips below $46 looking for $53 for now.