Inflation in many areas remains non existent. The most obvious may be crude which has been sinking as of late. What many might not realize is food deflation is very real and concerning. Here is an excerpt from the USDA website “Food-at-home prices declined overall in 2016, falling 1.3 percent below 2015 levels. This marks the first annual decline in supermarket prices since 1967. Looking at specific retail food categories, prices declined 21.1 percent for eggs, 6.3 percent for beef and veal, 4.1 percent for pork, and 2.3 percent for dairy and related products.” Some names are bucking the trend and may be a bullish tell. Tonight we look at MKC on two different timeframes, directly below is how it appeared in our Monday 1/30 Game Plan.

Stocks that can be bought as they take out their 200 day SMAs to the upside are MKC. MKC is a defensive food play up 3% YTD and 17% over last one year period and sports a dividend yield of 2%. It sends a very powerful message with five consecutive positive earnings reactions higher by 1.8, 2.6, 3.9, 2.3 and 3.9% on 1/25, 9/30, 6/30, 3/29 and 1/28. The stock is higher 6 of the last 8 weeks and showing good relative strength up 2.7% this week. Enter MKC with a buy stop above the 200 day SMA at 96.25, which is sloping downward slightly, although 50 day SMA is now inclining and puts right side of cup base in shape. Potential add on above 107.94 trigger in pattern that began week ending 7/8/16.

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