McDonald’s Corporation (NYSE:MCD) Long Term Technical Analysis January 2017

MCD Long-term outlook

The shares of MCD performed well in December, and overall it gained $2.45 from 119.27 to 121.72. The shift in current stock sentiment might be contributed from the sale of its China operation. McDonald announced on 10 January 2017 the sale of 20-year right for 80% of its business in China and Hong Kong to CITIC and Carlyle group. The partnership in line with the company strategic reorganization plan to turn the company into 95% franchised.

Analyst predicts 2017 will be a rosy year after the sale as the China operation which weighted heavily in the company performance. Aside from the sale, the company absorbs more resource which familiar with the market and ready to expand more through the franchise system.

New Month

Monthly chart

A flat performance in 2016 after the shares closed at $121.72, up $3.54 from $118.18. This result good as the sector performance in 2016 is rather dull with low consumption. The monthly chart of MCD also indicates indecision after the share price able to reach its trendline intersection.

The stock corrected down in January and will continue to search for support, previous month low at $117.71 will play a major role in supporting the price.

Weekly chart

The bullish indication is shown in the weekly chart. The price formed a bearish engulfing pattern at the end of November, but the candle never triggered and canceled when the bull brought the price higher than the candle pattern.

Currently, the price is testing the broken bearish trendline. If the bull can protect the advance in share price, traders will see MCD continue the long-term bullish trend.

Daily chart

The bull is under pressure in the daily chart of MCD, the price manage to close above the daily SMA 200. However, it moves back below it after re-test. Failure to maintain the position above the daily SMA 200 will jeopardize bull effort to bring the price up.

Trade plan

The long position best taken after successful re-test of broken bearish trendline. Another place to take a long position is the daily SMA 200.

The short position needs to wait for confirmation of bearish pattern close below the broken trendline.

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