MCD – McDonald’s Corp.

McDonald's Corp. (8/25/15) Short-term (Negative) : Intermediate Term (Negative) : Long-term (Negative) In the "nothing redeeming to see here" category, McDonald's is huge disappointment, and we need to remain cautious at this juncture. Below 116.30, it closed below the June 27th low close, now the worst close since December 2015. If it is going to bounce, it had better do it soon. The pattern is building a long-term "head-and-shoulders top" formation. These types of formations will get picked up by software designed to pick up these patterns and put out a bearish signal on the stock. Therefore, one needs to be aware that this break could initiate negative technical calls. The short to intermediate term target, should we break 114, is to 104.25 to fill the gap. The pattern would project even lower, to 100 from the head and shoulders top, but if we overlay a positive sector trend and after October a positive seasonal pattern, the news would have to be exceptionally bad to reach that lower target. For the moment, we would expect a breach of 114 to yield a target of 104.25. Any attempt to bounce would run into a convergence of the 50-day and 200-day moving averages, coincidentally at 120.50. One might hear the term "Iron Cross", which is the 50-day falling below the 200-day, which is currently happening in this case. To be redeemed, McDonald's stock would need to move above 120.50. mcd