MCD Long-term outlook

It is a gloomy month for MCD in September at least for the initial month before the share prices turned up and rallying near June high. The rally continues in October and prints fresh high above June high before reversing. Overall, the situation looks bullish nearing the company earnings announcement on October, 23.

Upgrade received from Guggenheim and Evercore ISI before the earnings result which shows optimism. Traders will monitor the earnings result and see if the bullish trend in the company share prices will continue or stopped.

Read McDonald September 2018 analysis

New Month

Monthly chart

In September MCD bounced from the bottom of channel shown on the monthly chart. However, the bullish bounce received another test by the bear this month. The bear is in control and brings the share prices down to test its bottom of the channel again. Traders will continue to observe the share prices movement this month to see whether bounce or breakout will happen.

Weekly chart

MCD looks breakout from the triangle and currently testing the breakout point. There is no bounce from the retest yet and it is possible the bearish pressure could push the share prices down toward the lower channel. At the current time, traders could place a long position with a tight stop below the support trendline.

Daily chart

Zooming out on the daily chart, MCD is on the position for a bounce from the trendline shown on the weekly chart. There is a bullish attempt today and a bullish close by the end of the day could lead to a rally. It is not confirmed yet but traders could start accumulating long positions.

Trade plan

The long position could be taken at the current support level shown on the daily chart. It is possible MCD will start a new rally after the bounce from triangle pattern on the daily chart. The area between $170.00 – $171.50 is the area to watch for the target.

Short position needs to wait until the channel shown on the monthly chart broken. Without any breakout below the channel, there is no change to the current bullish trend.