Kellogg Company (NYSE:K) has taken a step back from its May 10, five-year high of $75.56, slipping back below its 30-day moving average, which has acted as a source of support for the shares since late March. However, the $66 level helped capture this pullback, and the equity still sports a 6.4% year-to-date lead -- up 1.5% to trade at $68.72 at last check. Better yet, its latest dip has placed Kellogg stock near a historically bullish trendline, which 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 two similar signals over the past three years, and was higher one month later each time, averaging a 1.5% gain for that period. A comparable move from the stock's current perch would place it just shy of the $70 mark.
Analysts are firmly bearish towards Kellogg stock, leaving plenty of room for upgrades going forward. Of the 12 in coverage, 10 call the security a "hold" or worse, while only two say "strong buy." Shorts are in control, too, with the 17.95 million shares sold short now making up 5.7% of K's available float, or over one week's worth of pent-up buying power.
Additional tailwinds could come from a sentiment shift in the options pits. This is per K's 50-day put/call volume ratio of 1.43 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than all readings from the past 12 months. This suggests there has been a healthier-than-usual appetite for puts of late.