Mc Donalds Short-Term AnalysisConsidering it is my first Trading View post, I'd like to start by saying that I'm an experienced (5+ years) Options Trader purely based on Technical Analysis. I'll give my analysis on the price movement of a stock followed by a trade alert. Now as this is fairly for educational purposes, if you do decide to take a trade, it is your responsibility to manage your risk. If you do incur any losses, that is your responsibility too. (Not every trade is a winning trade and it is best to manage risk in order to reduce your losses and burn out your capital. Quite a common occurrence among options traders).
Now when I say short-term, I usually look at the 3-5 week price action. Considering MCD 's current price action, it is safe to say that we are trading well in this triangle pattern as you can see on the chart. Now, Friday validated that pattern, finding support at the $207 level.
On Tuesday, when the market resumes for a shorter trading week, we are going to look closely at the price action hoping to see the triangle intact, which if breaks, next support would be at the $206 level (Set your stop losses a little under this level).
Considering trend lines in the near past term, I see the stock riding up towards the $213-$214 mark. This could happen within the next 2 weeks. (Keep in mind, earnings are on Jan 28th, 2021). We could see a pre-earnings run up higher and probably a breakout back to the $220 levels.
As far as the indicators, the CCI is approaching a buy signal, however validation from the MACD is still to be confirmed.
The trade :
BTO Jun 18 2021 $220 Call
As I said, if the stocks goes below $206, you take the loss and move on, as it is very likely that if it breaks it will retest the 200 MA.
Now the expiry is 5 months out and you can choose to hold it into earnings or buy after, that is your choice. Or buy before and bank on any move prior.
Good luck trading!
