4 Trade Ideas for McKesson: Bonus Idea

Here is your Bonus Idea with links to the full Top Ten:

McKesson, $MCK, comes into the week at resistance and just short of confirming a double bottom. The Bollinger Bands® are starting to shift to the upside to allow a move. The RSI is rising through the midline toward the bullish zone with the MACD rising and negative. There is resistance at 782.50 and 800 before 812 and 826 then 844 and 858. Support lower is at 770 and 752. Short interest is low at 2.4%. The stock pays a dividend with an annual yield of 0.42% and has traded ex-dividend since June 1st.

The company is expected to report earnings next on August 4th. The June options chain shows open interest spread from 820 down to 700 on the put side and spread from 750 to 860 on the call side, neither with any firm outstanding strike. The July chain has biggest open interest at the 750 and 700 strikes on the put side and very little open interest on the call side. In the August chain open interest is biggest at the 750 and 730 put strikes and at the 810 and 830 call strikes.

McKesson, Ticker: $MCK

Trade Idea 1: Buy the stock on a move over 782.50 with a stop at 752.50.

Trade Idea 2: Buy the stock on a move over 782.50 and add a July 770/720 Put Spread ($17.40) while selling the July 820 Calls ($11.60).

Trade Idea 3: Buy the June/July 800 Calls Calendar ($13.40) and sell the July 730 Puts ($10.10).

Trade Idea 4: Buy the August 720/800/850 Call Spread Risk Reversal ($1.60).

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After reviewing over 1,000 charts, I have found some good setups for the week. These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday which with the first week of June and the strong May employment report in the books, saw sentiment shifting in the equity markets after starting the week at all-time highs.

Elsewhere, look for Gold to continue a short term downtrend while Crude Oil falls in consolidation under $100/bbl, near a change of character to a downtrend. The US Dollar Index looks to continue to move higher in broad consolidation near the top of the range while US Treasuries continue to test support in consolidation after avoiding a shift in character. The Shanghai Composite looks to continue digestion in the short term uptrend, on the edge of a shift to downtrend, while Emerging Markets pull back in their uptrend.

The Volatility Index looks to continue lower in the normal zone, but higher, giving a bit less of a tailwind to equities. The charts of the SPY, the QQQ and the IWM continue to look extremely strong on the longer timeframe and have reset out of overbought conditions. On the shorter timeframe the SPY, the QQQ and the IWM also look strong, with all printing all-time highs to start the week, but resetting momentum lower with short term pullbacks to end the week. This could continue. Use this information as you prepare for the coming week and trad’em well.