About General Mills
If you are looking for a safe and defensive stock to invest in, then $General Mills(GIS)$ General Mills (GIS) might just be what you need. As a food company, GIS owns popular brands such as Häagen-Dazs ice cream, Nature Valley Granola Bar, and other breakfast food products like Cheerios. Given that people are cutting down on expenses and eating more meals at home, this could benefit packaged food makers like GIS.
Recent Performance
GIS has been performing well, beating consensus estimated earnings per share for the past four quarters. The company has been gradually rising since the pandemic began (see chart below) and can be considered a defensive stock in bad times, providing investors with more than a 2% dividend.
GIS has been gradually rising since the pandemic
GIS is set to report its earnings before the market opens, and as a short-term swing trader, I am keen on taking advantage of any potential moves in the stock price. However, as with any earnings report, there is always a level of uncertainty, and it's crucial to be cautious and limit risk.
Technical Analysis
According to Tiger Broker Technical Analysis (see screenshot above), GIS has a short-term support level at 76.04. If the stock drops below this level, the next level of support should be around 73 (see chart below). As a trader, it's essential to pay attention to support and resistance levels, as they can help you make informed trading decisions.
GIS support level
Trading Strategy
My trading strategy for GIS after earnings is simple: buy call options at the strike price of 75 $GIS 20230421 75.0 CALL$ if the stock price is trading above 76. If the stock price drops below 76, I may consider buying call options at the strike price of 72.5 $GIS 20230421 75.0 CALL$ .
However, it's important to remember that GIS is a slow and steady stock (see below), meaning that even if the company reports excellent or negative earnings, the stock is unlikely to move too much. Therefore, as a swing trader, I will take small profits where available and not stay too long in the position. I will not be employing more complex option trading strategies today and just limit my max loss to the premium paid because it is hard to see how the market will move today after the FOMC meeting yesterday.
Fun fact: According to Wharton economist Jeremy Siegel, General Mills is one of the 20 best-performing stocks in the S&P 500 in the 50 years between 1957 and 2007, providing an average yearly return of 13.6%
Conclusion
Trading GIS after earnings requires caution and a short-term approach. As a swing trader, I will pay close attention to the technical analysis and support and resistance levels to make informed trading decisions. While GIS is a slow and steady stock, it still provides potential trading opportunities for those looking for a defensive and safe investment.
Remember, slow and steady wins the race, and taking small profits where available can lead to long-term success especially in uncertain times like this.
@TigerStars @MillionaireTiger @CaptainTiger @Daily_Discussion
Thank you for reading. Please like give me a like if you find my post interesting.
Comments