I have written quite a few posts since the spring about the potential long-term warning signs for McDonald’s (please see this post where I detail my reasoning). To update that analysis, it looks as though McDonald’s bears had better seize their opportunity now. We have just seen the stock put in a higher low in June as the stock bounced up to a resistance trendline which I have drawn for you.
On Friday, the stock printed a bearish engulfing candlestick on an uptick in sell volume which, after a prior rally, can indicate a downside reversal is imminent.
The stock has been a powerhouse for a decade now, with previous controversies at bay, and has garnered something of an image of invincibility. I suppose this is where the rubber meets the road and we will see if this is yet another buyable pullback in the march from $12 to $103. It is a short idea with downside confirmation, however. But in a bull market you simply have to wait for resistance to actually assert itself before getting carried away with the bear case.
On a more bullish note, WEN is still acting quite well in the fast food space. BKW is in consolidation mode but I am looking for an entry there long. And SONC is acting like a real winner, one that we have been talking about inside 12631 for months.
The next earnings for McDonald’s are scheduled for July 22nd.
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would u short this into earnings? strong usd might hit it also. on top of the weak technicals
Into earnings? Very tough for me, but below that trendline would rather be short than long…