Daily Stock Report

McDonald's Corp. - (MCD) - July 6, 2022

It has been a long road back for McDonalds Corp (MCD). Since bottoming out deep in the red zone back in February of 2021, the fast-food chain has been steadily climbing back up the rankings in the SIA S&P 100 Index report. Yesterday, it finally returned to the Green Favored Zone for the first time since October of 2019 after climbing 6 spots yesterday and 19 positions in the last month to 21st place.  

A big breakout is underway in McDonalds (MCD) shares. After peaking in January, MCD retreated in a correction that was finally contained near $220 in March. Since then, McDonalds has settled into a neutral Symmetrical Triangle pattern of higher lows and lower highs, while digesting the gains from a 2021 uptrend. 

MCD closing above the $250 round number has snapped the downtrend line and completed the triangle bullishly with an upside breakout. Initial upside resistance appears at the previous peak near $268, then a measured $290. Initial support appears at the 50-day moving average near $244.    

McDonalds (MCD) appears to be close to a potential technical turning point. After rallying in late 2021, the shares have spent 2022 to date trending sideways. Over the last six month, a symmetrical triangle of higher lows and lower highs has formed which suggests a period of consolidation within an ongoing trend. 

A close above $253.05 would snap a downtrend line and signal that the previous uptrend has resumed while a close above $258.10 would call off the current High Pole Warning with a double top breakout. On a breakout, initial upside resistance may appear at the previous peak near $268.55, followed b $285.00 based on a vertical count. 

On the other hand, initial support appears near $229.20 based on a 3-box reversal. A close below $224.70 would resolve the triangle to the downside and signal the start of a new downtrend with next potential support near $220.30 then $203.50 based on previous column highs.  

With a bullish SMAX score of 9, MCD is exhibiting strength against the asset classes. 

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