McCormick & Company, Incorporated (MKC) is a leading provider of spices, herbs and seasonings around the world. The stock is struggling so far in 2019, with a slippage of 0.3% and with a gain of just 3.6% since its Dec. 26 low of $134.02. The stock is in correction territory at 11% below its all-time intraday high of $156.00 set on Dec. 13. The weekly chart has been negative since the week of Dec. 28, but the stock held my annual value level for 2019 at $134.90 as the year began.
Analysts expect McCormick to report earnings per share of $1.69 when the company discloses results before the opening bell on Thursday, Jan. 24. The stock is not cheap, as its P/E ratio is elevated at 28.81, and the dividend yield is a paltry 1.64% according to Macrotrends. Given the company's global footprint, slowing global economic growth and weak local currencies in more than 150 counties bring uncertainty to this earnings call.
The daily chart for McCormick
McCormick has been above a "golden cross" since Dec. 6, 2017, when the stock closed at $103.00. A "golden cross" occurs when the 50-day simple moving average rises above the 200-day simple moving and indicates that higher prices lie ahead, and this had been the case for this stock. The last time shares of McCormick could have been bought at the 200-day simple moving average was on June 8, 2018, when the average was $102.16.
The 2018 close of $139.24 was input to my proprietary analytics, and new levels were generated for 2019, which are shown as horizontal lines on the chart. The stock is just below my semiannual pivot of $139.14 and above my quarterly and annual value levels at $136.07 and $134.90, respectively. My monthly risky level is $139.14.
The weekly chart for McCormick
The weekly chart for McCormick remains negative, with the stock below its five-week modified moving average of $140.56. The stock is well above its 200-week simple moving average, or "reversion to the mean," at $100.60, last tested way back in October 2009, when the average was $35.19. The 12 x 3 x 3 weekly slow stochastic reading is projected to slip to 33.60 this week, down from 38.56 on Jan. 18.
Given these charts and analysis, investors should buy McCormick shares on weakness to my quarterly and annual value levels of $136.07 and $134.90, respectively, and reduce holdings on strength to my monthly risky level at $153.30. My semiannual pivot is at $139.14.
Disclosure: The author has no positions in any stocks mentioned and no plans to initiate any positions within the next 72 hours.