Conagra Brands (CAG) has been trading sideways the past five months, and every test of the $38 level has, so far at least, failed. Our analysis of the trends and indicators suggest this resistance around $38 will be broken and prices will probably move into the $40s in the months ahead. Let's see what's behind the price action and indicators.
In this 12-month daily chart of CAG, above, we can see that CAG made its low for the year in January/February like many stocks. A strong rally lasted until the end of June and then CAG made a turn. Since early July CAG has been range-bound between $33 on the downside and $38 on the topside.
A more positive shift has been underway since early October, however. The slope of the 50-day simple moving average line turned up, matching the movement in the 200-day average line. The daily On-Balance-Volume (OBV) line started to move up again, signaling more aggressive buying even while prices declined.
The Moving Average Convergence Divergence (MACD) oscillator is above the zero line again for a new go long signal. Does the longer-term chart concur? Let's check.
When you look at this longer-term weekly chart of CAG, above, the short-term jiggles of the daily chart fade away. The slope of the 40-week moving average line has been positive for nearly three years -- impressive. Dips to and trading below this rising line have become buying opportunities so far.
The OBV line on this weekly timeframe has also been positive for a long time and suggests that buyers of CAG have been accumulating shares for a very long time.
In the bottom panel is the trend-following MACD oscillator, which has been in positive territory (above zero) nearly all of 2016. A fresh buy signal also just occurred.
Speaking of buying, I would go long CAG on a close above $38 risking below $36 or $35 and looking for $50 in the first half of 2017.