McKesson Surges 3.85% to $703 Amid Bullish Technical Breakout

McKesson (MCK) closed at $702.94, gaining 3.85% in the latest session and extending its rally to a two-day cumulative increase of 4.73%. The following technical analysis evaluates this movement within the broader context of historical price data spanning approximately one year, employing multiple validated methodologies to identify key trends, reversals, and probabilistic scenarios.
Candlestick Theory
Recent price action for McKesson reveals a bullish reversal pattern. The latest session formed a robust white candle closing near its high ($703.82), following a smaller bullish candle on the prior day. This two-day formation suggests accumulation momentum and invalidates the preceding consolidation near $670–$680. Critical resistance is established at the $703–$710 zone, corresponding to the April-May 2025 swing highs. Support emerges at $680 (recent swing low) and $650 (June 2024 base). A sustained breach above $710 would confirm bullish continuation, whereas failure may reactivate intermediate resistance near $690.
Moving Average Theory
The 50-day moving average (MA) currently slopes upward around $685, providing dynamic support during the August pullback. Notably, price reclaimed both the 50-day and 100-day MAs after the August 12 decline, signaling regained bullish traction. The 200-day MA near $635 anchors the longer-term uptrend. The convergence of the 50-day MA above the 100-day MA supports a positive medium-term bias. However, the 200-day MA’s distance from current prices highlights potential vulnerability to mean-reversion pullbacks, especially if volatility expands.
MACD & KDJ Indicators
MACD histogram bars have shifted into positive territory following a bullish crossover near the zero line, aligning with the two-day surge. This signals building upward momentum. Simultaneously, the KDJ oscillator shows the %K line crossing above %D from oversold levels below 30 in mid-August, now approaching overbought territory (>80). While this reflects strong short-term momentum, the overextended KDJ reading suggests fatigue may emerge near-term. Divergence is absent between the indicators, reinforcing their consensus on bullish momentum—though MACD’s longer cycle implies this may have greater sustainability than KDJ’s immediate sensitivity.
Bollinger Bands
Volatility expanded sharply during the August 7 sell-off (price hitting lower band) and the current rally (upper band near $710 tested). The bands had contracted notably in July, foreshadowing this breakout. Price now trades at the upper Bollinger Band ($710), indicating stretched conditions relative to recent volatility. Historically, such tests precede either band expansion (breakout continuation) or rejection (consolidation). Given high volume during the advance, a band expansion appears slightly more probable than immediate reversal.
Volume-Price Relationship
The 3.85% surge occurred on substantially elevated volume (1.06 million shares vs. 30-day average ~750k), validating buyer conviction. This mirrors the high-volume reversal on May 15–16 and contrasts with the distribution patterns observed during April 2025’s breakdown. Sustained volume support during advances in August suggests institutional participation, while diminished volume during pullbacks (e.g., August 18) implies limited seller urgency. Current volume-price alignment reinforces bullish bias, though climactic volume extremes could signal exhaustion if they recur imminently.
Relative Strength Index
Calculating RSI using a 14-day period: Average gains over the last two weeks dominate, yielding an RSI near 68, approaching overbought territory (>70). This aligns with the KDJ overextension. While RSI divergence is absent, its proximity to overbought levels cautions against aggressive entry here. Historically, McKesson’s RSI peaks above 70 have corresponded with temporary consolidation (see July 2025: RSI 73 preceding $730–$690 range formation). The indicator’s warning nature necessitates confirmation from price structure; a decisive close above $710 could delay overbought effects.
Fibonacci Retracement
Applying Fibonacci levels to the rally from the May low of $661 to the July peak of $735 identifies key retracement zones. The recent correction bottomed near $667 (August 14), precisely at the 61.8% retracement level ($667.50), which catalysed the current rebound. Resistance now converges at the 78.6% level ($708) and the psychological $710 barrier—a confluence explaining the current pause. A break above this zone opens the 100% extension near $735. Conversely, the 50% retracement at $698 offers initial support, reinforcing significance to the $700 round-figure battle.
Confluence and Divergence
Convergent signals strengthen the technical outlook: Volume validates the breakout; MACD and moving averages align with bullish momentum; Fibonacci resistance coincides with Bollinger Band tops at $710. The primary divergence exists between momentum oscillators (RSI/KDJ nearing overbought) and trend indicators (MA alignment, volume), suggesting potential consolidation rather than reversal. Given the multiple confirmations of upward momentum, McKesson’s path of least resistance appears higher, though tempered by short-term overbought readings. A close above $710 would likely accelerate gains toward the $730–$735 historical resistance, while failure to hold $690 may trigger profit-taking toward the 50-day MA.