First up is ConAgra Foods ( CAG), the food company behind many of the popular brands on your grocer's shelves. But it's not the food that's making ConAgra a tradable name this week -- it's the chart.
Right now, ConAgra is forming an ascending triangle pattern, a setup that's formed by a horizontal resistance level above shares and an uptrending support level to the downside. As CAG bounces in between those two technically important price levels, it's getting squeezed closer and closer to a breakout above resistance at $36. When that happens, we've got a buy signal in this $15 billion food company.Momentum, measured by 14-day RSI, has been bleeding off for the last two months. While that's not a positive sign for the pattern, the fact that RSI has been hugging its own trend line resistance level has some good implications. Since momentum is a leading indicator of price, we'll likely see a breakout in RSI before CAG's price breaks out. Treat it like an early-warning signal for this trade. If you decide to be a buyer, I'd recommend keeping a protective stop at the 50-day moving average.
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