4 Trade Ideas for General Mills: Bonus Idea

Here is your Bonus Idea with links to the full Top Ten:

General Mills, $GIS, was in a broad consolidation for 3 months when things got crazy with the COVID-19 virus and the market sank. The stock reacted with a spat of increased volatility, expanding what was a 3 point range to a 13 point range, still around the confluence of flat SMA’s. This lasted for 6 weeks until the beginning of April. At that point it started to move higher and continued until settling into a 5 point range in May. It has been in that range since.

Coming into the new week it is at the top of the range with the Bollinger Bands® opening to the upside. It has a RSI rising in the bullish zone and a MACD positive and moving higher. There is resistance at 63.75 and 65 then 70.25 and 72. Support lower comes at 62.40 and 61.10 then 59.25 and 58. Short interest is moderate at 3%. The stock pays a dividend with an annual yield of 3.08% and it started trading ex-dividend July 9th. The company is expected to report earnings next on September 16th.

The July options chain shows open interest spread out on the put side from 40 to 60. On the call side it is focused at 65 and 62.50 with smaller size at 67.50 and 70. In the August chain the 55 put has almost all of the open interest on the put side. On the call side it is spread from 60 to 67.50 biggest at 65. The October chain is the first to cover the earnings report. It has open interest spread from 40 to 52.50 on the put side. The call side is spread from 52.50 to 67.50 and biggest at 62.50.

General Mills, Ticker: $GIS

Trade Idea 1: Buy the stock on a move over 63.75 with a stop at 62.

Trade Idea 2: Buy the stock on a move over 63.75 and add an August 62.50/55 Put Spread ($1.54) while selling an October 70 Call (55 cents).

Trade Idea 3: Buy the August/October 67.50 Call Calendar ($1.08).

Trade Idea 4: Buy the October 55/67.50 bullish Risk Reversal (70 cents).

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After reviewing over 1,000 charts, I have found some good setups for the week.  These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday which heading into July Options Expiration sees the equity markets are showing renewed strength.

Elsewhere look for Gold to continue its uptrend while Crude Oil consolidates over support. The US Dollar Index continues to drift to the downside while US Treasuries possibly may be resuming their uptrend. The Shanghai Composite looks to continue the drive higher while Emerging Markets also move to the upside.

The Volatility Index looks to remain elevated, but moving lower, making the path easier for equity markets to the upside. Their charts look strong on both timeframes with the exception of the small caps. The QQQ is leading the charge on both timeframes as it seems to set new all-time highs every day. The SPY had a strong finish to the week and looks ready to break higher as well. The IWM however remains stuck in consolidation on both timeframes. Use this information as you prepare for the coming week and trad’em well.

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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