Stock of the day: McDonald’s

In a somewhat surprising turn, McDonald’s, a titan in the fast-food industry, has found itself embroiled in a noticeable decline, morphing from a steady climb to a consistent plummet since mid-2023. The stock, visibly bearish for the last six consecutive weeks on the weekly chart, elucidates a scenario that might be raising eyebrows among investors and analysts alike.

The initial rumblings of trouble for McDonald’s stock began to appear in July, signaled by a break below the mid-term uptrend line, demarcated by a black color on the chart. September only deepened the woes with a breakout below a crucial yellow horizontal support. Yet, it was a later event in September that solidified the bearish perspective – a break below the blue long-term uptrend line, a line significant due to its linkage of lows from 2020 and 2022.

The break below this blue trendline can be interpreted as activating a definitive long-term sell signal, marking a significant transition from its previous upwards trajectory. Presently, buyers may tentatively find reprieve at the 23.6% Fibonacci retracement level. However, a pragmatic assessment might indicate this as a mere pause in its descent.

A longer-term target, and perhaps a more consequential support, might be found at the 38.2% Fibonacci level, highlighted with an orange color on the chart. This level not only represents a substantial price retracement but also aligns with historical support that played a pivotal role through the second half of 2021 and the entirety of 2022. This support level, given the current trajectory and lack of bullish indications, could be where McDonald’s seeks stabilization in the future.

Source: https://www.axiory.com/analytics/stock-of-the-day/stock-of-the-day-mcdonald-s-10