Shares of McCormick & Company, Incorporated (NYSE:MKC) has formed a descending wedge pattern on their trading chart, indicating bearish momentum. The stock currently sits at $92.30.
Considering technical analysis, a “wedge down” is a stock price pattern where trend lines drawn on top and underneath a price chart converge into an arrow formation. Wedge shaped patterns, in general, are considered by technical analysts to be extremely useful in studying a term reversal of what the analyst feels is the current price trend.
As the price breaks free from the wedge, analysts expect that it is will return to the major trend. Technical analysts see a ‘breakout’ of this wedge pattern as bearish if it breaks out below the upper line. A wedge shape pointing downwards is used in analyzing an downward price trend within an overall upwards price trend.
The falling wedge is a bullish pattern that begins wide at the bottom and contracts as prices move higher and the trading range narrows.
RSI and P/E
McCormick & Company, Incorporated’s shares may have great momentum, but how has it been performing relative to the market? The stock’s price is 92.30 and their relative strength index (RSI) stands at 44.77. RSI is a technical oscillator that shows price strength by comparing upward and downward movements. It indicates oversold and overbought price levels for a stock. The price/sales ratio is 2.66. This reflects the applied to sales by the market. P/S is calculated by dividing the closing price of the share by their dollar-sales value.
McCormick & Company, Incorporated (NYSE:MKC)’s P/E is 25.54. P/E is a valuation ratio of a given company’s current stock price as compared to its earnings. A low P/E value suggests a stock is cheap as compared to earnings. For example, a P/E value of 20 means that the price equals the total of 20-year earnings. The average level is always different across the market and P/E must be compared per sector. McCormick & Company, Incorporated is in the Consumer Goods. Their PEG, the ratio used to determine a stock’s value while taking into account the earnings’ growth, is 2.88.
SIMPLE MOVING AVERAGE
The simple moving average is the most common method used to calculate the moving average of prices. It takes the sum of all of the past closing prices over a specific time period and divides the result by the number of prices used in the calculation. Increasing the number of time periods in the calculation is an effective way to ascertain the strength of the long-term trend and/or the likelihood that it might reverse. Some argue that this type of average is not necessarily useful because each data point in the series has the exact same impact on the result no matter where it occurs in the sequence. McCormick & Company, Incorporated’s 20-Day Simple Moving Average is -0.93%. Extending back, their 50-Day Simple Moving Average is -2.40%, looking even further back, their 200-Day Simple Moving Average stands at -4.74%.
Wall Street Sell-side analysts have a consensus recommendation of 3.00 on the stock. This is based on a 1-5 sliding scale where 1 represents a Strong Buy and 5 a Strong Sell. The same analysts have a consensus price target of 99.33 for the next 12=18 months.
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