Bull Signal Flashing for Kellogg Stock

A shift in sentiment could provide tailwinds as well

Deputy Editor
Sep 1, 2022 at 12:34 PM
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Kellogg Company (NYSE:K) has taken a step back from its Aug. 19, roughly six-year high of $76.99. However, it looks like the equity might already be recovering from this selloff, last seen up 1% to trade at $73.49 after the $72 level kept the recent pullback in check. Year-to-date, K is up 14.1%, and could add to these gains, as its latest dip has placed the shares near a historically bullish trendline that could help it rebound even further.

According to Schaeffer's Senior Quantitative Analyst Rocky White's latest study, K is within one standard deviation of its 80-day moving average. The food manufacturer has seen three similar signals over the past three years, and was higher one month later each time, averaging a 1.4% gain for that period. A comparable move from the stock's current perch would place it just above the $74.50 mark. 

K Chart September 1

Analysts are firmly bearish towards Kellogg stock, leaving plenty of room for upgrades going forward. Of the 13 in coverage, 11 call the security a "hold" or worse, while only two say "strong buy." What's more, the 12-month consensus target price of $73.84 is a slim 0.6% premium to K's current perch, which also leaves the equity open to a round of price-target hikes.

Additional tailwinds could come from a sentiment shift in the options pits. This is per K's 50-day put/call volume ratio of 0.90 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than 86% of readings from the past 12 months. This implies that while calls are still outnumbering puts, the latter is much more popular than usual. 

 

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