In his second "Executive Decision" segment on Mad Money Monday night our own Jim Cramer sat down with Lawrence Kurzius, chairman, president and CEO of spice maker McCormick & Co. Inc. (MKC) . We reviewed McCormick earlier this month, where I wrote that, "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?"
MKC, which is a holding in TheStreet's Trifecta Stocks portfolio, has been consolidating its sharp gains of late June and is probably set to break out to the upside again. Let's put aside those tiny spice bottles and look at the charts again.
In the updated daily bar chart of MKC, below, we can see a mostly bullish picture. Prices have been consolidating at a high level after their big rally from $106 to $120. A high level consolidation pattern suggests that traders and investors are buying in around current levels and not waiting for a deeper pullback to enter or add to positions. Some chart watchers will call this a bull flag formation. The two moving averages -- 50-day and 200-day -- are rising.
The daily On-Balance-Volume (OBV) line has been steady this month suggesting that buyers and sellers are in balance. The daily Moving Average Convergence Divergence (MACD) oscillator has crossed to the downside generating a take profits sell signal. The two moving averages that comprise this indicators are still very close so a reversal to the upside could happen soon.
In this weekly bar chart of MKC, below, we have a positive alignment of the indicators. Prices are well above the rising 40-week moving average line. The weekly OBV line shows a small dip within a three-year uptrend. The weekly MACD oscillator is rising bullishly.
In this Point and Figure chart of MKC, below, we can see the breakout at $110.87 and the potential longer-term price objective of $161.41.
Bottom line: MKC looks poised to move higher. Traders looking to add to long positions should buy around $118 as a deeper pullback does not seem to be in the cards. Aggressive traders could also buy more above $120. The $150-$160 area is our next longer-term price target.