Overview: McDonald's (MCD) on the daily chart has been consolidating within a broad range after a significant uptrend. The stock is currently trading at a pivotal point, testing a long-standing ascending trendline that has supported its bullish movement. Bearish pressure is evident from repeated rejections at a key resistance zone, suggesting a potential shift in market sentiment.
Context & Price History:
Ascending Trend: From approximately July 2024, MCD embarked on a strong uptrend, consistently finding support along the depicted blue ascending trendline. This indicates underlying bullish momentum and buyers stepping in on dips.
Major Resistance Zone (317 - 323): Since late 2024, MCD has repeatedly faced strong selling pressure in the 317 to 323 range, labeled as "320". This area has acted as a formidable ceiling, preventing further upward progression. We can observe what appears to be a multi-peak formation (potentially a triple top) at this resistance, a classic bearish reversal pattern.
Consolidation: Following the initial uptrend, the price action has entered a consolidation phase, oscillating between the "320" resistance and the rising trendline support.
Key Levels & Patterns:
Ascending Trendline (Blue Line): This is the primary support for the current market structure. A break below this line would signal a significant shift in the trend.
Major Resistance Zone (Red Shaded Area): Strong supply zone between $317 and $323. Multiple rejections here indicate significant selling interest.
Immediate Support Zone (Green Shaded Area): Around $290, this level represents the next key horizontal support below the trendline.
Key Level Support (Deep Green Shaded Area): A broader support range between $270 and $280. This area could provide strong demand if the stock experiences a deeper correction.
Minor Resistance/Bounce Point (Labelled 310): While not a strong horizontal support currently, the "310" label aligns with potential prior horizontal action and is shown as a retest point in the projected bearish scenario.
Current Situation: MCD is currently trading around $303.21. It has seen a sharp decline from the 317-323 resistance zone and is now directly approaching the confluence of the ascending trendline and recent lows. The highlighted blue circle indicates this critical area.
Potential Scenarios:
Bearish Breakdown (Primary Indication on Chart):
Breakdown Confirmation: If MCD fails to hold the ascending trendline support and closes convincingly below it (e.g., below $300), especially with increased volume, it would confirm a bearish breakdown.
First Target: The immediate target for bears would be the $290 horizontal support zone.
Second Target: If 290 fails to hold, the price could then move lower towards 270 to $280.
Bullish Reversal / Trendline Hold:
Reversal Confirmation: If MCD finds strong buying pressure at the current trendline support, we could see a bullish reversal candlestick pattern (e.g., a hammer, bullish engulfing, or morning star).
Upside Potential: A successful bounce could lead to a retest of prior minor resistance around the
310 and then towards 320
Trend Continuation: A decisive break above the $323 resistance would invalidate the current bearish pressure and signal a continuation of the broader uptrend.
Conclusion:
MCD is at a crucial juncture. The repeated rejections at the 317-323 resistance zone and the current approach to the ascending trendline indicate a potential for a significant directional move. Traders should closely monitor price action around the trendline. A break below opens the door for a move to 290 and potentially 270-280, while a strong bounce could see a retest of the higher resistance levels.
Disclaimer:
The information provided in this chart is for educational and informational purposes only and should not be considered as investment advice. Trading and investing involve substantial risk and are not suitable for every investor. You should carefully consider your financial situation and consult with a financial advisor before making any investment decisions. The creator of this chart does not guarantee any specific outcome or profit and is not responsible for any losses incurred as a result of using this information. Past performance is not indicative of future results. Use this information at your own risk. This chart has been created for my own improvement in Trading and Investment Analysis. Please do your own analysis before any investments.
Context & Price History:
Ascending Trend: From approximately July 2024, MCD embarked on a strong uptrend, consistently finding support along the depicted blue ascending trendline. This indicates underlying bullish momentum and buyers stepping in on dips.
Major Resistance Zone (317 - 323): Since late 2024, MCD has repeatedly faced strong selling pressure in the 317 to 323 range, labeled as "320". This area has acted as a formidable ceiling, preventing further upward progression. We can observe what appears to be a multi-peak formation (potentially a triple top) at this resistance, a classic bearish reversal pattern.
Consolidation: Following the initial uptrend, the price action has entered a consolidation phase, oscillating between the "320" resistance and the rising trendline support.
Key Levels & Patterns:
Ascending Trendline (Blue Line): This is the primary support for the current market structure. A break below this line would signal a significant shift in the trend.
Major Resistance Zone (Red Shaded Area): Strong supply zone between $317 and $323. Multiple rejections here indicate significant selling interest.
Immediate Support Zone (Green Shaded Area): Around $290, this level represents the next key horizontal support below the trendline.
Key Level Support (Deep Green Shaded Area): A broader support range between $270 and $280. This area could provide strong demand if the stock experiences a deeper correction.
Minor Resistance/Bounce Point (Labelled 310): While not a strong horizontal support currently, the "310" label aligns with potential prior horizontal action and is shown as a retest point in the projected bearish scenario.
Current Situation: MCD is currently trading around $303.21. It has seen a sharp decline from the 317-323 resistance zone and is now directly approaching the confluence of the ascending trendline and recent lows. The highlighted blue circle indicates this critical area.
Potential Scenarios:
Bearish Breakdown (Primary Indication on Chart):
Breakdown Confirmation: If MCD fails to hold the ascending trendline support and closes convincingly below it (e.g., below $300), especially with increased volume, it would confirm a bearish breakdown.
First Target: The immediate target for bears would be the $290 horizontal support zone.
Second Target: If 290 fails to hold, the price could then move lower towards 270 to $280.
Bullish Reversal / Trendline Hold:
Reversal Confirmation: If MCD finds strong buying pressure at the current trendline support, we could see a bullish reversal candlestick pattern (e.g., a hammer, bullish engulfing, or morning star).
Upside Potential: A successful bounce could lead to a retest of prior minor resistance around the
310 and then towards 320
Trend Continuation: A decisive break above the $323 resistance would invalidate the current bearish pressure and signal a continuation of the broader uptrend.
Conclusion:
MCD is at a crucial juncture. The repeated rejections at the 317-323 resistance zone and the current approach to the ascending trendline indicate a potential for a significant directional move. Traders should closely monitor price action around the trendline. A break below opens the door for a move to 290 and potentially 270-280, while a strong bounce could see a retest of the higher resistance levels.
Disclaimer:
The information provided in this chart is for educational and informational purposes only and should not be considered as investment advice. Trading and investing involve substantial risk and are not suitable for every investor. You should carefully consider your financial situation and consult with a financial advisor before making any investment decisions. The creator of this chart does not guarantee any specific outcome or profit and is not responsible for any losses incurred as a result of using this information. Past performance is not indicative of future results. Use this information at your own risk. This chart has been created for my own improvement in Trading and Investment Analysis. Please do your own analysis before any investments.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.