MCD finds buyers at key support level
McDonald's Corporation (MCD) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, MCD ended Thursday at 167.35 gaining $4.37 (2.68%), significantly underperforming the Dow Indu. (6.38%). Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (MCD as at Mar 26, 2020):
Thursday's trading range has been $9.93 (6.06%), that's below the last trading month's daily average range of $12.31. 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 higher 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.
After trading down to 161.00 earlier during the day, the stock bounced off the key technical support level at 161.54 (S1). The failure to close below the support could increase that levels importance as support going forward. After having been unable to move lower than 159.22 in the prior session, McDonald's found buyers again around the same price level today at 161.00. The last time this happened on March 13th, MCD actually lost -15.88% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Buying might speed up should prices move above the nearby swing high at 171.36 where further buy stops could get triggered.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Its common bullish interpretation has been confirmed for McDonald's. Out of 452 times, MCD closed higher 59.73% 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 63.72% with an average market move of 0.54%.