McExhaustion?

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McDonald’s has been a clear winner, even as the market tumbled this summer. It is no wonder traders seem to be in awe of how the stock has performed. In fact, you could argue McD’s has becoming part of a flight to safety/quality trade that had become popular during the market turmoil.

Looking at the monthly chart, though, the issue is whether the trade has now become too crowded. If McDonald’s finishes out next week on the highs, there is a case to be made that the buyers have exhausted themselves for the foreseeable future. After screaming higher since March, even the best of stocks get stretched. I will be watching next week’s acton closely.

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