After a significant decline the past twelve months, McKesson Corp. (MCK) has generated some technical signals that suggest a bottom is developing.
In this daily chart of MCK, above, we can see the slide from over $240 to below $150. The slide may have signaled it was over in January and February, when a downside gap and heavy volume gave a feeling that we were seeing classic capitulation by longs or the so-called "throw in the towel" action.
After this "give up" action, we can see prices bottoming in February-April and rallying above the 50-day moving average line, and the slope turning up. Prices are still below the declining 200-day average.
The On-Balance-Volume (OBV) line finally showed some upside life in April, signaling that buyers of MCK had become more aggressive and volume was heavier on days when the stock closed higher.
In this weekly chart of MCK, we only see a slight decline in the OBV line, suggesting that liquidation has not been that aggressive. Prices are poised to test the declining 40-week moving average line. In the lower panel, the Moving Average Convergence Divergence (MACD) oscillator generated a cover shorts buy signal.
I doubt if the basing process for MCK is over, so I would try to be patient and have my buy orders below the market in the $165 area for a "starter position," using a sell-stop below the 50-day moving average line.