Fairlead Strategies Idea Generator

Kellogg (K)

Defensive stocks generally look poised to keep outperforming in this tape due to their strong momentum relative to the SPX. One unique long setup in the consumer staples sector is Kellogg (K):

• We like to begin our assessment of a stock by looking at a monthly bar chart to gauge the long-term setup. The monthly chart of K, shown below, has a long-term bullish breakout after a multi-year basing phase. Long-term momentum is positive and strengthening, helping propel the uptrend further.

• Within the long-term context, K has promising upturns in our intermediate-term trend following gauges to suggest its gradual long-term uptrend will extend higher after consolidating in May and June.

• A measured move projection from K’s breakout targets approximately $82, which can be used as a targeted level, while consecutive closes below the 50-day MA (~$70) can be used as a trailing stop-loss.

---

Kellogg (K, $72.75):

Target: $82

Stop-Loss: $70