January 30

Pick Of The Week – Analysis On McKesson (Week 5, 2022)

Happy Lunar New Year to all my Chinese friends!

The Lunar New Year is the largest Chinese festival where lots of feasting and mingling happen. Please remember to practice good hygiene and stay safe in this ongoing pandemic. Health is the true wealth.

Talking about health, this week’s stock is in the pharmaceutical industry. The company was founded in 1833, nearly 200 years ago!

Introducing… McKesson (MCK)!

How has this heritage stock been performing lately? Is it outperforming the US stock market?

Let’s compare!

Performance Of US Stock Market vs McKesson

As the futures of S&P 500 was caught in a range bound price movement (depicted by the gray box), the share price of MCK took off to form a new all-time high! But MCK is no one time fluke.

Rewind to the start of 2022 and you’ll see that the futures of S&P 500 took a deep dive. How did the price of MCK fare?

The share price of MCK was also hit. However, the decline was gradual and not as deep.

We can thus conclude that MCK is a super strong stock which has tremendous potential, at least in the short term. And this is awesome news for us, traders!

Now, how strong is MCK? What can we expect?

How Explosive Is MCK?

With a market capitalization of $39b, MCK is no small company. How explosive is the price of MCK?

From the chart above, you can see that the each upward price movement lie in the range of 5 to 9.4%. This is explosive!

And there’s been 6 of such explosive upward price moves in just 6 months!

The next logical step is to uncover the key price levels of MKC to help us form a trading plan. Let’s go!

Key Price Levels

Are you able to spot the support and resistance areas of MCK? 

You’re good! There’s an immediate support area at $255 and a lower support area at $245. This means that if the share price of MKC were to drop, it would probably get supported at around $255 and then at $245. 

Another way to look at support and resistance areas is to view them as key price levels or turning points. 

The Strategy You Can Use To Trade MCK

When should you buy MCK? 

Should you buy it now as it is rising? Should you wait for a pullback? 

The short answer – wait for a pullback. 

Referring to the chart above, the price of MCK could pullback to its immediate support area at $255 or even deeper at $245. 

As I’m looking to capture a short term explosive move of MCK, I would prefer the pullback to be shallow. Using the analogy of a catapult, a good catapult is able to shoot an object over a long distance with minimal pull back distance. 

When the pullback arrives, I’ll be looking for a particular pullback scenario before I enter. I’d also want the price of MCK to remain above $255 for a greater chance of success. 

This entry will be discretionary, hence I’ve created an e-course with examples to share this strategy with precision and clarity – The Art Of Explosive Profits (AEP for short). 

You’ll be coached on how to fish for strong stocks like MCK instead of relying on hear-say, to be fluent in reading charts to shortlist stocks that are about to have an explosive move, and finally to identify the optimized entry and exit points to capture these explosive moves that you’ve been waiting for (in a safe manner, of course)! 

Have a look at the AEP and add this explosive trading strategy to your arsenal to seize more trading opportunities.

Why Is MCK The Stock Pick Of The Week?

MCK has been rallying hard while fear gripped the US stock market. 

Despite being a huge company with a market capitalization of $39b, MCK has demonstrated the ability of its share price to shoot upwards in an explosive manner – 6 times in the past 6 months!

The technical aspect of MCK looks great too, and a pullback could be on its way, presenting an excellent buying opportunity. 

However, you’ll need to know that I’m not a financial advisor, so please treat this article as education. Have fun conducting your research and I’d love to hear your thoughts in our Facebook Group.  

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Trade safe!

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