McCormick's Charts Suggest Further Weakness Ahead

Sellers of MKC have been more aggressive for several months now.

Jim Cramer gave a nod to McCormick (MKC)  Tuesday in his Real Money column "These 3 Companies Are Always Pruning, Buying and Growing Brands." This spice company, Cramer noted, has been very aggressive in its acquisitions, giving you 9.5% net growth and has given you a four bagger over the last decade.

The charts, however, are telling a different story at this point in time.

In the daily bar chart of MKC, below, we can see that the shares have been in a decline for the past 12 months. The stock is trading below the declining 50-day moving average line and below the declining 200-day line. MKC is holding just above its February/March lows.

The On-Balance-Volume (OBV) line shows a year-long decline telling us that sellers of MKC have been more aggressive for several months now. The Moving Average Convergence Divergence (MACD) oscillator has spent much of the past year below the zero line.

 

In the weekly Japanese candlestick chart of MKC, below, we can see that the shares have been in a decline since the middle of 2020. MKC is trading below the declining 40-week moving average line.

 

The weekly OBV line has been in a decline since October. The MACD oscillator is bearish.

 

 

In this daily Point and Figure chart of MKC, below, we can see a downside price target in the $79 area.

 

 

 

 

In this weekly Point and Figure chart of MKC, below, we see a potential $77 price target.

 

 

Bottom-line strategy: I seem to be using McCormick products more than ever this summer grilling season, but it has not helped the charts which are pointed down. Avoid the long side of MKC for now.

 

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