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McDonald's Corp - (MCD) - October 13, 2023

McDonalds (MCD) has been sliding down the rankings in the SIA S&P 100 Index Report since July, exiting the green zone and falling through the yellow zone. After a drop of three places yesterday and 10 spots in the last month to 54th position, McDonalds has returned to the Red Unfavored Zone for the first time since April of 2022.

Other restaurant stocks have been declining in tandem with McDonalds, suggesting that investors may be getting concerned about the health of consumer spending in a higher interest rate environment. The best ranked large-cap Leisure stock is Hilton which has a 10 SMAX score and is sitting just outside the green zone in the SIA S&P 500 Index Report. Over the last two months, McDonalds (MCD) shares have come under increasing distribution. Since peaking short of the $300.00 round number back in August, a new and accelerating downtrend of lower highs has emerged. Meanwhile, two previous uptrend support lines have failed, the 50 and 200-day moving averages have been broken and the averages themselves have completed a bearish Death Cross, all signs that the shares have come under distribution.

Currently, the shares are hanging around $250.00, but they need to decisively retake $255.00 to signal an upturn. Meanwhile, next downside support doesn’t appear until previous lows around $227.50 then closer to $220.00.

This 1% chart shows how McDonalds (MCD) shares have dropped off of a cliff in recent weeks. Back in August, MCD peaked in a bearish Bull Trap where it broke out by one row then reversed downward, which coincided with a failure to break through the $300.00 round number. Since then, the shares have consistently fallen back toward $250.00 without even a 3-box bounce along the way, a sign of distribution. MCD has also completed bearish Double Bottom and Spread Triple Bottom patterns in recent weeks.

Currently MCD is testing an uptrend support line. A close below $243.00 would snap that and confirm the start of a new downtrend. A horizontal count suggests next potential support may not appear until closer to $226.75, followed by previous column lows near $220.05 and $213.70. Initial resistance on a bounce appears near $258.05.

With a bearish SMAX score of 5, MCD is exhibiting weakness against the asset classes.

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