October 24 Earnings: McDonalds - The Rise Of The WageMcDonald's comparable sales will be aided by continued investments and menu innovation.
Alongside above mentioned factors, its international presence with a softer USD will aid overall margins.
However, with rising wage growth and soft quarterly restaurant spending globally, I expect profits to be under pressure.
Guidance should underwhelm with the aforementioned factors.
I am starting McDonald's with a $150 PT for the post-earnings move.
A tight stop well over ATH at $170 is advised.
MCDL trade ideas
MCD Bat, demand zone and 150 fig combinationWhenever there is a huge uptrend, those who are not willing to chase high price always say that they'll wait for pull back.
While there are still people contradicting with themselves that when a pull back actually happens, they change there mind and think,
"the uptrend is over , this is the top!!!!" and starting shorting the stock.
This makes no sense to me, as I'm always willing to chase high with acceptable risk and set-up, and if it did give a pull back, I'm more willing to long.
This is the case for MCD, or even for the stock index.These years, too many people told me that they may wait for pull back to long SPY,
but when a small pull back happens like the past few days, they change their mind to take the short and believe that's the top..
Plan your trade and trade your plan, and don't change your mind that easily !
McDonald's to continue run higherManagement
CEO is turning to tech to turn things around and seems very switched on. Has worked as a manager in McDonald's and has been CEO of PizzaExpress and then CEO of Wagamama.
Products
Moving into healthier but with fast food speed
Shorter queues
Mobile ordering coming soon
Home delivery is a wildcard that may improve sales
Burgers are still not the best
Still a stigma of dirty food (McDonald's isn't cool)
A lot of fast food competition
Financial Health
Gross margins improving
Revenue decreasing
Geographical Exposure
McDonald's operates worldwide, but is most popular in western countries.
Technical Analysis
A support zone ranging from 150.30 to 154.81. This zone is formed by a combination of multiple trend lines and important moving averages in multiple time frames.
A resistance zone ranging from 155.15 to 156.28. This zone is formed by a combination of multiple trend lines and important moving averages in multiple time frames.
Resistance @159.08 from a horizontal line in the daily time frame.
Trade
An entry @156.29. This is a Buy Stop order right above the resistance zone.
An exit @151.76. This is a Stop Loss order right below the 10 day low.
The worst case loss on the trade is limited to 4.53 points, which is 2.90%.
When investing 25.00% of your capital in this trade, your total portfolio risk will be 0.72%.
McDonald's AB=CD PatternJust something to be mindful of if you're long. We don't have confirmation for a short sale, but patterns like this that complete large measured moves can some times indicate a correction.
-Always use a stop
-Trade only with money you can afford to lose
-Be open to multiple scenarios
-It's okay to be wrong about anything