Down with the clown
My plan is to buy 
MCD puts on Monday before earnings. This idea is based purely on technical analysis, which I think sufficiently supports the theory that the price will go lower in the short term. However, in the broader scope, this drop could produce a great buying opportunity for those looking to go long.
The weekly chart shows last week’s solid green candle closed right below the 100 period SMA.MCD has not dropped below the 200 period SMA since March 2020, so I think the overall trend will stay intact once this downtrend has concluded.
I will support my thesis by analyzing price levels, trend patterns, moving averages, volume analysis, and RMI.
[LL & HH analysis]
On the daily chart, we can seeMCD has been in a downtrend since late January. A lower high of $279.82 was made last week and unless a higher high is made, we will be trying to find a lower low.
This is also clear on the Awesome Oscillator (AO) & MACD indicator. AO confirms the price is in a strong downtrend while MACD is positive and descending back towards the zero line.
[Volume Profile analysis]
The Volume profile shows the price is currently in an accumulation zone, however the RMI Trend Sniper just gave a bearish signal. I would expect the price action from here to play out like the previous cycle, which saw a 14% drop after the signal was given.
I doubt the price will go down by that much since there is significant historical support at the 0.75 level. Due to the timing of this earnings release and other factors that could influence the market this week, I could see the price going as low as $253 in the near term, before finding support around $258 and reversing back into an uptrend after May.
MCD is currently in a strong downtrend on the 4hr chart since the end of February. AO and MACD are close to crossing to the negative side, so it appears we will be heading lower soon. I’m looking for an opportunity to buy puts at $277 on Monday at some point.
[Moving Averages]
MCD is currently below the 50, 100, & 200 SMAs. The 200 SMA was rejected upon retest which supports the idea that we’re moving to lower lows. It’s also noteworthy that this pattern looks like an inverse cup & handle.
[Conclusion]
The technicals are pointing to further downside for this stock while keeping with the longer trend. This makes for a great swing trading opportunity or a good indicator for buyers that lower prices are yet to come.
Let me know what you think of my assessment ofMCD or if your charts are making you draw a different conclusion. Thanks for reading!
MCD puts on Monday before earnings. This idea is based purely on technical analysis, which I think sufficiently supports the theory that the price will go lower in the short term. However, in the broader scope, this drop could produce a great buying opportunity for those looking to go long. The weekly chart shows last week’s solid green candle closed right below the 100 period SMA.
MCD has not dropped below the 200 period SMA since March 2020, so I think the overall trend will stay intact once this downtrend has concluded.I will support my thesis by analyzing price levels, trend patterns, moving averages, volume analysis, and RMI.
[LL & HH analysis]
On the daily chart, we can see
MCD has been in a downtrend since late January. A lower high of $279.82 was made last week and unless a higher high is made, we will be trying to find a lower low.This is also clear on the Awesome Oscillator (AO) & MACD indicator. AO confirms the price is in a strong downtrend while MACD is positive and descending back towards the zero line.
[Volume Profile analysis]
The Volume profile shows the price is currently in an accumulation zone, however the RMI Trend Sniper just gave a bearish signal. I would expect the price action from here to play out like the previous cycle, which saw a 14% drop after the signal was given.
I doubt the price will go down by that much since there is significant historical support at the 0.75 level. Due to the timing of this earnings release and other factors that could influence the market this week, I could see the price going as low as $253 in the near term, before finding support around $258 and reversing back into an uptrend after May.
MCD is currently in a strong downtrend on the 4hr chart since the end of February. AO and MACD are close to crossing to the negative side, so it appears we will be heading lower soon. I’m looking for an opportunity to buy puts at $277 on Monday at some point. [Moving Averages]
MCD is currently below the 50, 100, & 200 SMAs. The 200 SMA was rejected upon retest which supports the idea that we’re moving to lower lows. It’s also noteworthy that this pattern looks like an inverse cup & handle.
[Conclusion]
The technicals are pointing to further downside for this stock while keeping with the longer trend. This makes for a great swing trading opportunity or a good indicator for buyers that lower prices are yet to come.
Let me know what you think of my assessment of
MCD or if your charts are making you draw a different conclusion. Thanks for reading!
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