4 Trade Ideas for McCormick: Bonus Idea

• Posted by Greg Harmon
• on November 7th, 2022

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

McCormick, $MKC, comes into the week at resistance. The Bollinger Bands® are open higher to allow more upside. The RSI is rising in to the bullish zone with the MACD positive and climbing. There is resistance at 79.50 and 81 then 82.25 and 83.50 before 85.25 and 88 then 89 and 91. Support lower comes at 78 and 76.25 then 73.50 and 72 before 71. Short interest is low at 2.6%. The stock pays a dividend with an annual yield of 1.87% and has been trading ex-dividend since October 7th. The company is expected to report earnings next on January 25th.

The November options chain shows largest open interest at the 70 strike on both the put side and the call side. In the December chain open interest is lighter and spread from 80 to 65 on the put side and from 80 to 110 on the call side. The March chain, covering the next earnings report, has light open interest and shows it at the 75 and 60 strikes on the put side while at the 85 and 90 strike on the call side.

McCormick, Ticker: $MKC

Trade Idea 1: Buy the stock on a move over 79.50 with a stop at 77.50.

Trade Idea 2: Buy the stock on a move over 79.50 and add a December 75/70 Put Spread ($1.00) while selling the March 95 Call (55 cents).

Trade Idea 3: Buy the December/March 85 Call Calendar ($2.55) while selling the December 75 Put ($1.10).

Trade Idea 4: Buy March 70/80/85 Call Spread Risk Reversal (90 cents).

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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 November in the books, saw equity markets showed how quickly they can lose their luster.

Elsewhere look for Gold to pause its pullback while Crude Oil consolidates. The US Dollar Index looks to consolidate in the uptrend while US Treasuries resume their downtrend. The Shanghai Composite looks to possibly reverse the downtrend while Emerging Markets continue the move lower.

The Volatility Index looks to continue to drift lower from an elevated level making the path slightly easier for equity markets to the upside. Their charts look weak though on the shorter timeframe. On the longer timeframe both the IWM and SPY are holding up in the bounce. But the QQQ retesting the lows looks worse. Use this information as you prepare for the coming week and trad’em well.

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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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