ConAgra Foods to Report Earnings Under the Cloud of a Strong Dollar

The weekly chart shows share-price vulnerability.

Author:: Richard Suttmeier
Publish date:: Mar 25, 2015 8:08 AM EDT

NEW YORK (TheStreet) -- Shares of ConAgra Foods (CAG) - Get Report, the maker of Slim Jims, Gulden's mustard and many other branded food products, have traded in a broad range during the last 24 months. If the company beats earnings estimates, a new multiyear intraday high is possible, but a miss would result in a negative weekly chart profile.

In the past two years, the stock traded as high as $37.28 on Aug. 5, 2013, before it fell 25% to a low of $28.09 on Feb. 27, 2014. The stock then rallied 33% to a multiyear intraday high of $37.45 on Dec. 11. The weekly chart shows the two highs as a potential long-term double-top given a negative reaction to earnings.

ConAgra is scheduled to report results for its fiscal third quarter ended in February before the bell on Thursday. Analysts expect the company to report earnings of 53 cents a share. The company recently lowered its earnings projections for fiscal 2015, blaming the strong dollar.

Let's take a look at the performance measures for ConAgra, key trading levels, and analysis of daily and weekly charts.

ConAgra ($34.63 at Tuesday's close) gained 7.7% in 2014, and is down 4.5% so far in 2015. The stock is 7.5% below its Dec.11 high and is 3.5% above its 2015 low of $33.45 set on March 11.

Investors looking to buy ConAgra after earnings should place a good-till-canceled limit order to purchase the stock if it drops to $28.13, which is a key level on technical charts until the end of the end of 2015.

Investors looking to reduce holdings after earnings should place a good-till-canceled limit order to sell the stock if it rises to $39.31, which is a key level on technical charts until the end of June.

Let's take a look at the daily chart for ConAgra.

Courtesy of MetaStock Xenith

The daily chart gapped below the stock's 200-day simple moving average (green line) back on Sept. 10, 2013, when the average was $33.87. The stock declined to as low as $29.87 on Sept. 30, and then rebounded to the 200-day SMA in early 2014, when the average was $33.88. The stock then fell 18% from the high of $34.18 on Jan. 15, 2014 to its 24-month low of $28.09 on Feb. 27, 2014.

The stock then rebounded to its 200-day SMA of $31.69 on May 28, and had a volatile period until breaking out above the 200-day SMA of $31.31 on Aug. 12. The stock then began a momentum run-up of 20% to the 24-month high of $37.56 set on Dec. 11.

So far this year, the stock has held its 200-day simple moving average at $33.63 on March 11 and then failed at its 50-day simple moving average (blue line) at $35.30.

Let's take a look at the weekly chart for ConAgra.

Courtesy of MetaStock Xenith

The weekly chart for ConAgra will shift to negative given a close this week below the stock's key weekly moving average of $34.90. The momentum reading shown in red along the bottom of the chart is projected to decline to 29.67 from 30.30 last week. Note that the 200-week simple moving average (green line) at $30.22 is a major chart support. Technicians call the August 2013 high and the December 2014 highs a double-top.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stock mentioned.