McKesson looks to deliver upside on all timeframes

• Posted by Greg Harmon
• on December 23rd, 2015

McKesson, $MCK, distribute pharmaceuticals at a retail sale level and provide health information technology, medical supplies, and care management tools. They have their hands in a lot of places. And it seems like it is working out for them. Their stock price look ready to head higher no matter what your timeframe.

Monthly

Lets start with the long term investor. The chart above of the monthly price shows a strong trend higher from 2009 until earlier this year. During that timeframe the momentum indicators had moved to very strong readings with the RSI over 85 and the MACD at 12 year extremes. But the pullback that started in June reset those indicators.

The RSI held the mid line on the pullback while the MACD has not turned yet. But the price retraced almost exactly 38.2% of the move higher and then reversed. This month’s candle will confirm follow through to the upside. The previous high would be the first target and then a 127% extension to about $300.

Weekly

For the intermediate term investor, or position trader, the picture is also bright. The pullback found support at a prior important band around 180 and started back higher. The momentum indicators also found bottoms and are reversing higher. The MACD gave a buy signal first as it crossed up after Thanksgiving.

The RSI followed and is now piercing the mid line into the bullish zone. There might be some short term resistance around 204, but it looks like clear sailing higher to 220 from there, with the prior high in sight then.

Daily

For the short term or swing trader, this week marked a major move. Jumping out of a 3 week consolidation zone as the Bollinger Bands® expanded, it has filled the gap from September. The momentum indicators also lifted off of consolidation ranges, becoming more bullish. There are several possible resistance zones ahead now. The first is at 204 and then not until 216 and 221, with another void until 238.

So whatever way you look to address the market, McKesson is one stock you should be looking at for enhancing your portfolio.

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