ConAgra Brands Inc. (CAG) made an upside breakout from a four-month base/consolidation pattern. Prices look like they can continue higher but it is the longer-term picture of CAG that is most interesting.
Let's check out our usual array of charts and indicators to see what sort of strategy looks best for traders and longer-term investors.
In this daily bar chart of CAG, below, we can see that prices are above the now rising 50-day moving average line. CAG is still below the declining 200-day line but a close above $57 will change that situation.
The On-Balance-Volume (OBV) line, above, is not rising strongly but notice the action in late August when prices make a new low the OBV line did not make a new low. This is a small and subtle bullish divergence but it looks to be pivotal. The trend-following Moving Average Convergence Divergence (MACD) oscillator gave cover shorts buy signals in July and September and is now above the zero line for an outright go long signal.
In this weekly chart, below, I selected a five-year timeframe to show that the decline and recent consolidation pattern on CAG may be just a correction in a longer-term advance. Prices are still below the declining 40-week moving average line but that may not last long. The weekly OBV line is pretty steady the past two years and will probably make a new high before prices do.
The weekly MACD oscillator has signaled a cover shorts buy signal in the bottom panel.
In this Point and Figure chart, below, we can see an upside breakout and a potential price target of $39.79. A rally to near $40 means the odds of making a new high have improved.
Bottom line: Aggressive traders and investors should look to buy CAG at current levels, on a dip to $35 and on strength above $37.