MCD finds buyers again around 216.38
McDonald's Corporation (MCD) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, MCD ended the week 2.59% higher at 217.09 after edging lower $0.33 (-0.15%) today on low volume, slightly underperforming the Dow Indu. (-0.09%) ahead of tomorrow's Presidents' Day market holiday. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (MCD as at Feb 14, 2020):
Friday's trading range has been $1.46 (0.67%), that's far below the last trading month's daily average range of $2.75. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently notably lower than usual for MCD.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar.
Prices broke below the key technical support level at 217.10 (now R1), which is likely to act as resistance going forward. After having been unable to move lower than 216.19 in the prior session, McDonald's found buyers again around the same price level today at 216.38. The last time this happened on Monday, MCD gained 1.18% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying might speed up should prices move above the nearby swing high at 218.39 where further buy stops could get activated. 2019's high at 221.93 is within reach and we might see further upside momentum should the stock manage to break out beyond.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "2 Consecutive Lower Closes" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for McDonald's. Out of 288 times, MCD closed higher 57.64% 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 66.67% with an average market move of 0.74%.