MCD closes within previous day's range
McDonald's Corporation (MCD) Technical Analysis Report for Jul 13, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, MCD finished Monday at 184.92 edging higher $0.04 (0.02%), slightly underperforming the Dow Indu. (0.04%). Trading $3.35 higher after the open, McDonald's was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (MCD as at Jul 13, 2020):
Monday's trading range has been $4.24 (2.28%), that's slightly above the last trading month's daily average range of $3.78. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for MCD.
One bearish candlestick pattern matches today's price action, the Bearish Hikkake Pattern.
After trading down to 184.71 earlier during the day, the stock bounced off the key technical support level at 184.89 (S1). The failure to close below the support might increase that levels significance as support going forward. When prices bounced off a significant support level the last time on July 6th, MCD actually lost -1.42% on the following trading day. After spiking up to 188.95 during the day, the market found resistance at the 20-day moving average at 185.86.
Although the share is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Selling might accelerate should prices move below the nearby swing low at 182.62 where further sell stops could get activated. Further selling might move prices lower should the market test June's close-by low at 178.88.
Among the seven 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 450 times, MCD closed higher 58.89% 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 62.67% with an average market move of 0.62%.