Regular readers will be familiar with my analysis of the last few weeks for McDonald’s, which was already showing signs of increasingly bearish sentiment. Indeed my most recent post two weeks ago was entitled Ronald McDonald Not A Happy Clown which really summed up the mood for the stock.
Friday’s price action drove the nail firmly home on the daily chart, with the stock opening almost $8 lower and gapped down at the market open, where it remained for the session, finally closing at $148.27 on ultra high volume. The trigger for the sudden move lower was weaker than expected results, taking the price rapidly through the support region at $155.
The weekly chart reflects the very negative picture for this stock, but note the wide spread down candle is also associated with a volatility signal, and therefore it’s possible we may see a short term recovery. Volume on this candle is ultra high and confirming last week’s heavy selling. So with deep resistance now overhead, coupled with the volume point of control at $155.22, and a low volume node below, the longer term outlook continues to remain very bearish. This is further confirmed with the transition of the trend monitor from blue to red. In the longer term this stock may extend the bearish trend further towards the $130 price area, where a potentially well developed support platform awaits, which may then provide some temporary respite.
