Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Ronald McDonald Not A Happy Clown

Published 02/21/2018, 11:39 PM
Updated 07/09/2023, 06:31 AM

MCD Daily

The daily chart for McDonald's (NYSE:MCD) certainly makes for some interesting reading at present, not least because unlike many other blue chip stocks, this stock has failed to follow through on the recovery in the Dow Jones and sister markets, and instead has continued lower following the after shocks of recent volatility. And of particular interest here is the volume associated with price action, which reveals some interesting anomalies.

If we start with the initial move lower on the 30th January, the volume here is as expected with heavy selling on the wide spread down candle with the stock moving $6 on the day. The following three days then sees the price move lower, before the extreme volatility of the 5th February arrives with the strong recovery later in the day generating the extreme wick to the lower body of the candle. However, note the volume, which is well below what we would expect to see, and indeed is lower than that of the 30th January, so sending a strong signal that unlike other stocks which saw sustained buying in the intraday recovery, for McDonald's this was not the case, with the volume only high, and not extreme. So two signals here. First a clear anomaly with ‘low volume’ given the extreme price action, and second signaling a lack of buying. And it is the latter that is now reflected in the move lower, and despite attempts to rally higher over two consecutive days this was on falling volume, so confirming a lack of buying interest for McDonald's at present.

Friday’s price action confirmed this bearish sentiment with volume rising in line with the relatively wide spread down candle, with Tuesday’s weak price action on the gapped down open adding further downwards pressure. The support region at $155 is now coming into play, but if this is breached expect the current bearish picture to develop further in the medium term. This weak technical picture continued in yesterday’s trading session, with McDonald's attempting to rally, but closing well off the highs with a deep wick to the upper body of the candle. And note the volume on the candle, it is high, and signaling further weakness ahead with the trend monitor indicator also remaining resolutely red.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.