MCK breaks below Thursday's low
McKesson Corporation (MCK) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, MCK finished the month -2.12% lower at 150.16 after losing $3.45 (-2.25%) today on high volume, significantly underperforming the S&P 500 (0.77%) ahead of Monday's earnings report. Closing below Thursday's low at 150.99, the market confirmed its breakout through the prior session low after trading up to $4.22 below it intraday.
Daily Candlestick Chart (MCK as at Jul 31, 2020):
MCK is set to report earnings before tomorrow's market open. For the upcoming report, analysts expect the company to have earned $2.32 per share. The company's last earnings report was released on May 20, 2020, when McKesson Corporation reported earnings of $4.27 per share surpassing market expectations by 5.2%.
Friday's trading range has been $6.73 (4.38%), that's far above the last trading month's daily average range of $3.90. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for MCK.
After trading down to 146.77 earlier during the day, the stock bounced off the key technical support level at 148.67 (S1). The failure to close below the support might increase that levels importance as support going forward. McKesson closed below the 50-day moving average at 153.28 for the first time since July 14th. When this moving average was crossed below the last time on July 7th, MCK lost -0.84% on the following trading day.
While the share is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Stock Earning Report based market condition "Trading Day before Earnings Report" stand out. Although it is usually interpreted as neutral, it has actually shown to be bullish for McKesson. Out of 31 times, MCK closed higher 58.06% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 58.06% with an average market move of 1.56%.