MCD closes above its opening price after recovering from early selling pressure
McDonald's Corporation (MCD) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 4th day in a row, MCD ended the month 5.32% higher at 194.28 after losing $1.13 (-0.58%) today, significantly underperforming the Dow Indu. (0.44%). Trading up to $2.51 lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (MCD as at Jul 31, 2020):
Friday's trading range has been $3.04 (1.57%), that's slightly below the last trading month's daily average range of $3.54. 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 slightly higher than usual for MCD.
Three candlestick patterns are matching today's price action, the Southern Doji and the Takuri Line which are both known as bullish patterns and one neutral pattern, the Doji. The last time a Southern Doji showed up on April 3rd, MCD gained 10.42% on the following trading day.
After trading as low as 191.64 during the day, the stock found support at the 200-day moving average at 191.82. Prices are trading close to the key technical resistance level at 195.64 (R1).
While still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bullish Bounce off SMA 200" stand out. Its common bullish interpretation has been confirmed for McDonald's. Out of 14 times, MCD closed higher 64.29% 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 57.14% with an average market move of 0.43%.