Bad day in the market, good day for this Stock: $MCK – August 30, 2022

by DAN SPY MCK 
This is Scott with your Chart of the Day. Let’s be honest, the market is pretty blah. That’s a technical term, by the way, Mark Minervini writes about that in his book.

When the market is blah there is really not much to do. And as Dan Fitzpatrick said earlier this week in one of our live sessions, “When the market is bad it is actually really easy to trade because there is not a lot to choose from.”

Now, I did find one stock that showed some pretty good relative strength today, despite the fact that the SPY ( NYSEARCA: SPY ) closed below its 50-day moving average, and that is McKesson ( NYSE: MCK ).

As you can see McKesson ( NYSE: MCK ) has been in a pretty strong uptrend, for the most part, holding around its 50-day moving average here throughout the month of July. And then we got a nice little breakout here in August. The market was rallying and this stock rallied and made new highs.

At stockmarketmentor.com we always talk about paying attention to stocks that are near their highs when the market is near its lows because that is a signal of pretty good relative strength and, potentially, future leadership. We are seeing that today with McKesson ( NYSE: MCK ), where the market was down on the day but McKesson ( NYSE: MCK ) closed near the highs.

Not only that, it is getting pretty clear support right around that 21-day exponential period moving average. If I bring out my fancy drawing tool here I can even draw a pretty clear downward-sloping trendline. And so we have a stock that is in a pretty strong uptrend, in a bad market, and near the highs.

I think McKesson ( NYSE: MCK ) is definitely a stock that we need to pay attention to. I am going to set an alert on my software right around that 368.00 level just to see if it can get above, stay above, and take out this red day here. Even the volume is pretty telling, when it does pull back it doesn’t really pull back with much aggression. But when it goes up, you definitely see the buyers step in and support price.

And so there is lots of positive action here on McKesson ( NYSE: MCK ). As I said, I will have an alert right around that 368.00 level and look for a strong breakout coming on volume. I am going to add it to my watch list, it might be worth taking a look at as well if it fits your style.

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