ConAgra Brands (CAG) is at an interesting point after more than forty years. Two trendlines are coming together: an upward trend from 1982 and a downward trend from the 1997 high. This setup suggests that the stock is at a crucial support level, indicating a chance for a big price movement. ConAgra offers an attractive approximate 8.1% dividend yield, providing a nice return while investors wait for the stock to move. The company faced supply chain issues, especially with chicken production in 2025. However, these challenges are easing, and volume growth is expected in the latter half of fiscal 2026. Management has reaffirmed its fiscal 2026 earnings guidance, projecting earnings per share (EPS) between $1.70 and $1.85. This suggests that any negative news may already be factored into the stock price. Overall, the situation looks favorable. There’s a potential “Smart Money” opportunity here, as worries have led to selling despite a solid technical setup and strong dividend yield. ConAgra has the potential for a recovery in 2026, supported by its historical trends and attractive yield. Currently, ConAgra (CAG) is in a significant technical squeeze that has been developing for over forty years. The support line from 1982 and the resistance line from 1997 are forcing the price into a tight range. For traders, this kind of long-term consolidation may lead to increased volatility soon. One straightforward trading strategy is to take advantage of the high option premiums, which reflect the market’s current uncertainty. After a nearly 25% drop in 2025, implied volatility is high at around 35%. Selling cash-secured puts that expire in late January or February 2026, below the key support line, allows traders to collect a good premium and establish a clear entry point at a historical low. This strategy is appealing because the stock offers an over 8% yield. Economic data from late 2025 showed core inflation stubbornly above 3%, making this stable yield attractive. Additionally, management’s reaffirmation of 2026 earnings guidance suggests there’s a solid base to prevent major declines, hinting that the bad news is already priced in. For those looking to capitalize on a potential price increase, long-dated call options are a good way to prepare for a breakout. We should look at the June 2026 expiration cycle, as the supply chain issues are expected to be resolved by then. This time frame gives months for the company to recover and possibly drive the stock price higher. To lower the cost of a bullish trade, we can consider using bull call spreads. By purchasing a call option near the current price and selling a higher-strike call, we reduce the upfront cost. This strategy limits potential gains but significantly improves the risk-reward ratio, especially given the current high volatility.

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