Conagra Brands (CAG) is due to report earnings on Thursday. We reviewed the charts on February 24. and wrote that "Last week we wrote' '...let's wait for a rally above $36.38 to tell us a turn is underway' and that still looks like good advice."
Prices did rally above $36.38, which is positive but we are now seeing some hesitation around the previous high in late August in the $39 area.
Let's check out the charts and indicators again.
In this daily bar chart of CAG, below, we can see that prices have retreated a little from an attempt at overcoming the August peak. Prices are trading above the rising 50-day and rising 200-day moving average line. The On-Balance-Volume (OBV) line looks a little stalled at the end of March and the Moving Average Convergence Divergence (MACD) oscillator has turned downward to a fresh take-profit signal.
In this weekly Japanese candlestick chart of CAG, below, we can see that the two most recent bars represent a bearish engulfing pattern. A bearish candle pattern this week would confirm this as a top reversal. A new high for the move up would refresh the uptrend. The trend is still positive as prices are trading above the rising 40-week moving average line. The weekly OBV line is neutral but could be turning upward in a more positive direction. The MACD oscillator has just turned upward to a fresh outright-buy signal.
In this daily Point and Figure chart of CAG, below, we can see a potential $42 price target. A trade at $39 is needed to refresh the uptrend.
In this weekly Point and Figure chart of CAG, below, we can see a possible $47 price target. Again, a weekly trade at $39 will be bullish.
Bottom line strategy: Continue to hold the longs in CAG recommended in late February. Aggressive traders could add to longs above $39. $42 and then $47 are the price targets.
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