McCormick - Weak Stock -- Strong Setup

Company description

McCormick & Company operates in the food industry. The company is known for the production of spices, herbs and other flavoring products. In addition, McCormick & Company is active in the production of seasonings and special food ingredients for the catering industry, for households and for food manufacturers. In the area of spices and herbs, McCormick & Company offers a wide range of products that are available both in retail and in bulk for the food industry and catering.

Fundamental outlook

Recently, the industry has suffered somewhat - especially in the area of packaged food, in which the company operates. Since Corona, the fundamental data speaks volumes. Higher operating expenses lead to declining margins. These have fallen by a whopping 20% over the last four years. It goes without saying that the share price cannot reach record highs.

Chart technical outlook

This is also clearly evident when looking at the price trend. The latest movement can be classified as a technical correction within a potential bearish flag, which already indicates a further trend continuation to the downside. I expect further sustained downward movements to around USD 59. The downward momentum should develop with another low. I am watching the stock closely because I am planning to open a short position.

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