Conagra Brands Inc. (CAG) has been in a slow-motion decline since late July, but perhaps that decline is now drawing to an end. Let's check out the charts and indicators of this giant food company known for brands like Birds Eye, Duncan Hines, Healthy Choice and others.
In this daily Japanese candlestick chart of CAG, below, we can see that prices have been slowly making lower lows into early January. Prices could be making a higher low this month, but that doesn't get us out of the woods yet. Prices are trading below the declining 50-day moving average line and the cresting 200-day moving average line.
The On-Balance-Volume (OBV) line shows improvement from around the middle of January. Hopefully this pattern of more-aggressive buying can continue. The Moving Average Convergence Divergence (MACD) oscillator shows some improvement from January and is just slightly below the zero line. Maybe a new buy signal will be seen soon.
In this weekly Japanese candlestick chart of CAG, below, we see a mixed picture. Prices are trading below the declining 40-week moving average line, but we can see a number of recent lower shadows telling us that traders are rejecting the lows.
The OBV line shows only a slight drift lower in recent months, suggesting that CAG has fallen more by its own weight than by aggressive buying. The MACD oscillator is on the zero line, but it can turn up easily (yes we know it can also fall below the zero line).
In this Point and Figure chart of CAG, below, we used daily price data. Here there is a minor downside price target of $33 indicated. A trade up at $36.38 is likely to improve the picture.
Bottom line strategy: Maybe it is time for some Peter Lynch research with a visit to your local supermarket. Let's see how their products are moving and how much shelf space they have. Meanwhile, let's wait for a rally above $36.38 to tell us a turn is underway.
