Conclusion, Investment Implications, Strategy

Consumer Staples stock General Mills, Inc. (GIS) and Health Care stock Cigna Corporation (CI)  are currently rebounding from recent tests of their minor (Tactical) uptrends whlle also resuming their Strategic trends of relative outeprformance versus the S&P 500.  These conditions establish potential low risk buying opportunities in these stocks.  They are Asbury Momentum ideas.

General Mills (GIS): Analysis and Rationale

General Mills, Inc. (GIS) manufactures and markets branded consumer foods worldwide. The company operates in five segments: North America Retail; Convenience Stores & Foodservice; Europe & Australia; Asia & Latin America; and Pet. It offers ready-to-eat cereals, refrigerated yogurt, soup, meal kits, refrigerated and frozen dough products, dessert and baking mixes, bakery flour, frozen pizza and pizza snacks, snack bars, fruit and salty snacks, ice cream, nutrition bars, wellness beverages, and savory and grain snacks, as well as various organic products, including frozen and shelf-stable vegetables. It also supplies branded and unbranded food products to the North American foodservice and commercial baking industries; and manufactures and markets pet food products, including dog and cat food. The company operates 466 leased and 392 franchise ice cream parlors. General Mills, Inc. was founded in 1866 and is headquartered in Minneapolis, Minnesota.

The upper panel of Chart 1 below plots GIS daily since January along with its 200- and 50-day moving averages, widely-watched major and minor trend proxies.  The lower panel plots a corresponding chart of the daily relative performance of GIS versus the S&P 500 (SPY) along with its green 63-day moving average, which we use to identify the Strategic, quarterly trend of relative performance.

Chart 1

The upper panel shows that GIS is rebounding from a successful Jly 29th test of its 50-day MA, which is currently situated at $72.34.  The lower panel shows that the daily relative performance line between GIS and SPY is rebounding from a Jly 29th test of its 63-day MA, suggesting that GIS’s 2022 quarterly trend of relative outperformance is still intact and resuming.  Note that similar tests of the quarterly relative outperformance trend on Jun 2nd and Mar 22 closely coincided with advances to new highs in GIS.

Combined, these conditions suggest a low-risk buying opportunity into this uptrending stock.

Risk/Reward

Table 1 below shows that considering a $83.00 upside target with a protective stop placed below the $75.02 area, a long entry price of $77.00 would provide a 1:3.0 risk/reward ratio (risking $1.00 to make $3.00) with an initial risk of 2.6%.

Table 1

Cigna Corporation (CI): Analysis and Rationale

Cigna Corporation (CI) provides insurance and related products and services in the United States. Its Evernorth segment provides a range of coordinated and point solution health services, including pharmacy, benefits management, care delivery and management, and intelligence solutions to health plans, employers, government organizations, and health care providers. The company’s Cigna Healthcare segment offers medical, pharmacy, behavioral health, dental, vision, health advocacy programs, and other products and services for insured and self-insured customers; Medicare Advantage, Medicare Supplement, and Medicare Part D plans for seniors, as well as individual health insurance plans to on and off the public exchanges; and health care coverage in its international markets, as well as health care benefits for mobile individuals and employees of multinational organizations.  The company was founded in 1792 and is headquartered in Bloomfield, Connecticut.

The upper panel of Chart 1 below plots CI daily since January along with its 200- and 50-day moving averages.  The lower panel plots a corresponding chart of the daily relative performance of CI versus the S&P 500 (SPY) along with its 63-day moving average, which identifies the Strategic, quarterly trend of relative performance.

Chart 2

The upper panel shows that CI is rebounding from successful Jly 14th and 21st tests of its 50-day MA, suggesting that the minor uptrend is still intact and is resuming.  The lower panel shows that the daily relative performance line between GIS and SPY is rebounding from an Aug 3rd test of its 63-day MA, which suggests CI’s 2022 Strategic trend of relative outperformance is also still intact and resuming.  Note that similar tests of the quarterly outperformance trend on Mar 29th and Feb 3rd closely coincided with new legs higher in the price of CI as shown in the upper panel.

Combined, these conditions also suggest a low-risk buying opportunity in this stock.

Risk/Reward

Table 1 below shows that considering a $330.00 upside target with a protective stop placed below the $270.77 area, a long entry price of $285.00 would provide a 1:3.2 risk/reward ratio (risking $1.00 to make $3.20) with an initial risk of 5.0%.

Table 2

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Please consult the table showing our Asbury 6 key market metrics to help determine if this investment is suitable for you.