Kellogg stock sweeter than its cereal




Whether the U.S. is in a recession or at peak production, people are eating cereal. Kids, adults, doesn't matter. Kellogg (K) has been a known brand for years as they continue to hoard space in the consumer staple sector.


Long-term uptrend


Kellogg Daily Chart. Source: TradingView


The cereal company was on an uptrend from early 2019 until the most recent market sell-off that began in February. In fact, the stock was up 29% from January 2019 to January 2020. After the sell-off, buyers swooped in and bought the dip and Kellogg's stock price has begun stabilizing.


Price support


Kellogg Daily Chart. Source: TradingView


While not heavily tested, there does appear to be support at the $61 price level. There was support for the stock at that price level in early April, but the stock hasn't tested the support since. Although it hasn't tested the support in over a month it could be a good sign. Support can get wore out after being tested multiple times and it too needs a break.


Relative strength shows that the stock hasn't been oversold in over a month, but came very close to being oversold once shares were being sold for $61. When the stock was at its bottom in March, the RSI still didn't show oversold. There appears to be strong support for this consumer staple and it's possible for it not to be oversold before being overbought.


Conclusion


Before the market sell-off, the cereal stock was on a strong uptrend. Shares are trading 11.9% under their high before the sell-off and there's a lot of positive momentum in the stock right now. Some analysts have predicted that the stock can reach as high as $78, but the mean analyst price is $68.


Stocks are shaky, but the consumer staple sector has proven that it can still perform well.