MCD breaks below Thursday's low
McDonald's Corporation (MCD) Technical Analysis Report for Oct 11, 2019 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, MCD ended the week -1.26% lower at 209.02 after losing $2.74 (-1.29%) today, notably underperforming the Dow Indu. (1.21%). The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 211.50, the market confirmed its breakout through the previous session low after trading up to $2.83 below it intraday.
Daily Candlestick Chart (MCD as at Oct 11, 2019):
Friday's trading range has been $4.60 (2.16%), that's far above the last trading month's daily average range of $2.60. Things look different on the weekly timeframe, where the market's trading range of the last week has been below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for MCD.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bearish Outside Bar. Notwithstanding a strong opening the stock closed below the prior day's open and close, forming a bearish Engulfing Candle. The last time this candlestick pattern showed up on September 9th, MCD lost -3.49% on the following trading day. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
The share closed back below the 100-day moving average at 210.78 for the first time since October 3rd. McDonald's was sold again around 213.27 after having seen highs at 213.13, 213.47 and 213.14 in the last three trading sessions. Obviously there is something going on at that level.
Though still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Among the 15 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Closed below last periods low" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for McDonald's. Out of 374 times, MCD closed higher 58.29% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 67.91% with an average market move of 1.03%.