Conagra Brands Inc. (CAG) was upgraded to a Buy recommendation Monday by TheStreet's quantitative service. Let's check out the charts and indicators of this global food company to see if the quantitative approach and the technical approach are on the same page.
In this daily bar chart of CAG, below, we can see that prices gapped to the upside earlier this month. The rally lifted prices to its highest level this year and its best level since late 2018. Prices had moved sideways for the prior nine months before the gap to the upside. CAG is now well-above the rising 50-day moving average line and the bullish 200-day line.
The daily On-Balance-Volume (OBV) line has been in an uptrend the past year and it has pointed us in the right direction the entire time. The rising OBV line confirms the price strength and tells us that buyers of CAG have been more aggressive. The Moving Average Convergence Divergence (MACD) oscillator turned up above the zero-line in November and thus was in a bullish set-up before the gap to the upside.
In this weekly bar chart of CAG, below, we can see the recent upside surge. Prices are above the rising 40-week moving average line and the weekly OBV line shows some improvement in recent weeks. The MACD oscillator on this longer time frame has just turned up for a new buy signal.
In this weekly close only Point and Figure chart of CAG, below, we can see that the software is projecting a potential upside price target in the $50 area.
Bottom line strategy: CAG has hung onto the bulk of its recent gains so new buyers should not expect much of a dip to get long. Risk a close below $32 for now looking for a longer-term gain to the $50 area.
