Fast Food = McDonald's? Investors Think Not

This time of year there is a hurried bustle in the air. Gift buying everywhere. Sure, you can buy all of you gifts for the holidays online but what fun is that? Some people actually like to go shopping. The crowds at the malls, all the music, everyone is jolly. And of course, if you are out all day, you are gonna need some nourishment. So it is also the time of fast food. And when you think of fast food, you think of McDonald's (MCD). But you know what, traders are not. Take a look.

McDonalds (MCD)

McDonalds (MCD) peaked just under $100 in January and has had a hard time since. a brief push higher led to a double top in September and October before new lows into November. Rising off of that low, it is already showing signs of tiring with an Evening Star Candle Wednesday, accompanied by a Relative Strength Index (RSI) that is turning back at the mid-line and a Moving Average Convergence Divergence indicator (MACD) that is fading. Combine that with Bollinger band that are restricting any further upside and the recipe is for a pullback. Instead, Burger King, (BKW) and Wendy’s/Arby’s (WEN) are where traders are focusing.

Burger King (BKW)

Burger King (BKW) re-emerged as a publicly traded company in June and dropped 20% over the next 2 months. Finding a bottom it has been stair stepping higher, and the steps have been accelerating. It is currently consolidating in a bull flag and trying to peak over the top. Should it get over 17.25 there is a measured move higher to 18.00 on the next step. The RSI is technically overbought, but barely and moving sideways. Look for a move over 17.25 as the next entry.

Wendy’s/Arby’s (WEN)

Wendy’s/Arby’s (WEN) had been in a down trending channel from February until it broke out above it the day before Thanksgiving (definitely not a coincidence). It consolidated on the move over the 200-day Simple Moving Average (SMA) and is now testing new higher highs. The RSI and MACD support more upside and a move over the July highs at 4.80 could get it rocking. Use that as your entry.

Disclaimer: The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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