That is why tonight we are going Off The Charts to play a special Mad Money version of the Price Is Right with General Mills, a stock that my charitable trust, ActionAlertsPlus.com owns… this is a game that you should always be playing when you are thinking about buying your favorite stocks… and just like the TV show, we lose when we guess too high.

So, at $52.61 is General Mills, a stock that lagged the market today, a stock worth buying… or is the price too high… as high as this gratuitous second time around Cheera-mid, like our Lister-mid, our Mac-n-Cheese-amid, and of course our beer-amid… this price point is a question that you would not hesitate to ask yourself before buying a box of Cheerios vs. Wheaties… or a four pack of Yoplait vs. Dannon… to say nothing of Hamburger Helper vs. Alpo… and the stocks are no different… now there are a lot of people who like to look at the charts to try to divine where a stock is going… and what they are willing to pay for it… they are called technicians… and while this is not my method, I have a healthy respect for the fact that a lot of the big institutional money managers who really move stocks, are basing their decisions on the charts… and at the very least we want to be aware of what they are probably thinking.

Now, according to Rick Bensignor, he is the chief market strategist at Execution Limited, you might have seen him on today during the wonderful and fabulous “The Street Sign” show… he is also the writer of the top gun trader newsletter, at TheStreet.com where I am chairman… and the top gun trader newsletter guy is also someone who has made stellar calls this year based on the charts on our show… what does he say about General Mills… he agrees, like the too high Cheer-amid… that the current price of General Mills is too high… and would look a whole lot better with a pullback to anywhere between $48 and $50.

What does Bensignor see in this chart that makes him think that General Mills is too expensive… why don’
t we take a look at the weekly chart… see look at this.. if General Mills move up to between $55 and $57, there are a whole lot of different things that contribute to what technicians call resistance… see he has just got a ton of them… this is the level that he does not think… he has got a cloud base… a downtrend line… a Fibonacci retracement… and the 200 day moving average, it is about 56... he has got four reasons why this thing cannot get thru… where buyers get exhausted, and sellers start overwhelming the market pushing the stock back down… hey listen, one reason… two reasons… four I give up.

First, the stocks downtrend line from its all time high, something that a lot of technicians will be looking at as an important level, that comes in at $55... okay, comes in right here at $55... that is going to hurt it… the 200 day moving average, to measure how close a stock is to a long term trajectory, it is about a 56... man there is so much going against it… there are some more complex, more sophisticated tools that technicians like, I mentioned the Fibonacci number, that is a popular one… that according to Bensignor, creates more resistance at $56.23... and the base line of General Mills is cloud chart… that is this thing… okay, kicks in at $56.26, and it is falling… when Bensignor adds all of these up, he sees a lot of different barriers to General Mills going above $56... which means the current price at $52.61, he does not think there is much upside.

I have to tell you, between this… among this, this, this and this… there have to be literally half of the mutual funds in the country that will not buy this stock… cause of this chart work… but the daily chart shows why Bensignor would like General Mills on a pullback to between $48 and $50ish… this is where the levels of support are… he does not think this thing is going to get taken out… it is the opposite of resistance, it is where buyers overwhelm sellers and then push the stock higher… he sees the uptrend line from the stocks March low, and he thinks that it supports around $50.50... and this is something that many technicians will take their queues from when the stock gets there… the bottom of General Mills’ daily cloud chart, remember that is that Japanese system that we like so much, is kicking in at $49.75.

Then Bensignor thinks that there is a third source of support for General Mills coming… that td setup that he writes about in Top Gun Trader, one of the ways technicians predict when buyers and sellers should become exhausted… that means the sellers are going to be exhausted right here… so I mean all of these things that are bad here, are good here… Top Gun Trader Rick has given us classic technical analysis… he has told us where the stock can hold, that is the floor… and he has given us how high it can go, that is the ceiling… he is suggesting that General Mills from this chart will not break out of its range either way… but it will hit the floor and then bounce off and start going higher… that is his entry point… in other words, Bensignor thinks that General Mills works on a pullback based on the charts.

Okay, enough about the charts… what about the fundamentals… the underlying facts about the companies business that I like to look at… because I am a fundamentalist, more in the vein of Warren Buffett… I think that the fundamentals agree with Rick’s reading of the charts… every Friday I rank the stocks in my charitable trust from a 1 to a 4... 4 being the worst, one being the best… and I send out emails about these new rankings to people… a 1 is one that I would buy for the trust right now… but a 2 is one that I would buy only on a pullback… and this weekend when I sent out my email I rated General Mills a 2... this rating system is something that I used when I was running a half a billion dollars at my old hedge fund.. you can get the bulletin from TheStreet.com where I am chairman… but I am giving you the rating of the stock right here.

Why do I think that a pullback is worth waiting for?… look, this is a high quality food company… one of my favorite consumer stable stocks, and I like it, I have owned it since the ‘80’s… but it has been out of style for most investors… and they sold off the defensive stocks that are more economically sensible… they did it again today… look, the company is a terrific innovator, it is a great marketer, it has got extensive cost cutting going on… but it missed the last quarters street estimates for the first time in two years… and that means that it has got to be a 2 not a 1 for me.

Not only did General Mills miss the number… oh man, .07 cents shy of the streets consensus… it did so just a month after management suggested that the quarter was running in line… that hurt the companies credibility… right now this incredibly consistent company sells at only 12 times earnings… the same valuation of the cohorts of which it is better than… if the company could prove that its earnings moves was just a blip, than I think that we are going to bump right up thru the resistance that Rick Bensignor talked about… but otherwise I do not want to pay up for this stock… I still like the company, as General Mills should deliver both the highest and the most predicable earnings growth among its peers… plus it should benefit from lower commodities costs… the weaker dollar… even though it is up against tough compares… but given the earnings miss and the fact that none of the consumer stable stocks are in favor… I agree with Bensignor… I need to wait for the pullback before I buy more of this stock… I need for it to go down here… let’s think… the earnings were disappointing… I think they were an aberration… otherwise I would be bolting from the stock right here… and selling it… I would be selling it right here, betting that I could not take the pain down to here.

Here is the bottom line…