McCormick & Co. (MKC) is a household name, but many investors probably don't know the company and just walk by its products unknowingly in the supermarket.
McCormick's stock price already was in an established uptrend but exploded to new highs about a week ago. Let's take a look at the charts and indicators of McCormick this morning and see if we can spice up our recommendations on the company, which earns a mention this morning from Jim Cramer in his opening piece and is a part of the Trifecta Stocks portfolio..
In this daily bar chart of MKC, below, we can see an uptrend in the price for MKC the past 12 months and a real explosion in recent days. The slower-to-react 200-day moving average line has maintained a positive or bullish slope the past year. The 50-day moving average line had a bearish slope from April into May but quickly turned up again last month. Trading volume looks uneven, but the daily On-Balance-Volume (OBV) line was positive up until April and then corrected for about six weeks before turning up again. A rising OBV line tells us with a simple line chart that buyers of MKC have been more aggressive. The trend-following Moving Average Convergence Divergence (MACD) oscillator gave a cover shorts and outright go-long signal last month as it quickly moved above the zero line.
In this weekly bar chart of MKC, below, we can see over the past three years that prices trended higher into early 2016 and then made an extended sideways consolidation around $100 or so. The 40-week moving average line has been positive for much of the time and prices are clearly above the line now. The weekly OBV line shows that investors have been accumulating longs in MKC and the MACD is bullish on this longer time frame.
In this Point and Figure chart of MKC, below, we can see the upside bullish breakout at $111.98 and the longer-term potential price target of $152.33.
Bottom line: MKC is clearly in a bull move higher, so the question is where do we buy it and what do we risk? Traders should try to buy a minor dip in the price of MKC, maybe just below $114, and then risk a close below $110 for now. The $150 area is my upside price objective. Spicy enough for you?