MCK breaks back above 50-day moving average
McKesson Corporation (MCK) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
MCK finished Wednesday at 152.75 gaining $1.88 (1.25%) on high volume, strongly outperforming the S&P 500 (-0.46%). Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (MCK as at Sep 16, 2020):
Wednesday's trading range has been $3.09 (2.04%), that's slightly below the last trading month's daily average range of $3.81. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for MCK. Prices continued to consolidate within a tight trading range between 149.51 and 154.91 where it has been caught now for the whole last trading week.
The market managed to close back above the 50-day moving average at 152.54 for the first time since September 3rd. When this moving average was crossed above the last time on September 2nd, MCK actually lost -1.24% on the following trading day. Unable to break through the key technical resistance level at 152.82 (R1), the share closed below it after spiking up to 154.68 earlier during the day. The failure to close above the resistance could increase that levels importance going forward.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying might speed up should prices move above the close-by swing high at 154.91 where further buy stops could get activated. Selling might accelerate should prices move below the nearby swing low at 149.51 where further sell stops could get triggered. Further selling might move prices lower should the market test August's close-by low at 148.04.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing Low" stand out. While it is usually interpreted as neutral, it has actually shown to be bullish for McKesson. Out of 727 times, MCK closed higher 55.71% 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 56.81% with an average market move of 0.58%.