As for inflation, Connolly admitted that not only is inflation higher than its initial forecasts, it's higher than he's ever seen. "All we can do is react," he said, and hope that there is some relief in the future.
In our Jan. 7 review of CAG we wrote that, "The charts and indicators of CAG are not compelling enough to recommend a new long position. Avoid it for now but we may want to come back in several weeks."
In the daily bar chart of CAG, below, we can see that the shares have lost ground over the past 12 months. CAG made a sharp and quick plunge to the downside in early March before a quick rebound. Prices are currently back above the 50-day and 200-day moving averages. The slopes of these two moving averages are bottoming but have yet to turn positive.
The On-Balance-Volume (OBV) line has chopped sideways to lower the past year. The Moving Average Convergence Divergence (MACD) oscillator made a new low in early March but has since swung back up to the zero line.
In the weekly Japanese candlestick chart of CAG, below, we see a mixed picture. Prices made a slight new low in early March but a harami pattern can be seen with the candles. The rebound has taken prices back above the declining 40-week moving average line.
The OBV line has been a "rock" and made a higher low when prices made a lower low -- a classic bullish divergence. The MACD oscillator also made a higher low and is ready to cross above the zero line.
In this daily Point and Figure chart of CAG, below, we can see a potential downside price target of $24.
In this weekly Point and Figure chart of CAG, below, we used close-only price data. Here we get a lot of price history and a $25 price target.
Bottom-line strategy: Longer-term I believe that CAG can go higher on the charts, but, unfortunately, we have to deal with short-term swings and a weak broader market. Avoid the long side of CAG for now and let a new base develop. A correction to the $25 area may be a great long-term buying opportunity. We'll see.