MCD stock appears to be forming a possible reversal pattern on its daily time frame, as price has failed in its past attempts to break past the $103.00/share barrier. MACD is reflecting selling momentum at the moment.
For now the 50 SMA (simple moving average) is holding as support for the pair, as it also lines up with the $100.00/share floor. A break below this area could be indicative of more losses to come, as the next support area is at the 200 SMA.
MCD Stock Outlook
MCD shares have been up by close to 8% for the past quarter but has since given back 0.5% since the end of April, as shares of rival food chains like Wendy’s and Burger King have reported strong gains.
The latest Consumer Reports survey showed that of all the major U.S. burger chains, McDonald’s hamburgers were the worst tasting. The results are based on responses from 32,405 subscribers to Consumer Reports, and more than 96,200 dining experiences at 65 fast-food and fast-casual chains.
A drop below the $100.00/share mark could lead to another 0.5% in losses if price eventually tumbles down to the $97-98/share area. RSI is also heading south, indicating a buildup in selling pressure for MCD stock.
However, if this turns out to be a major correction though, price could rebound around its current levels and make another run for the $103.00 mark. Company prospects aren’t showing signs of a possible bounce though.
Fundamentals, on the other hand, paint a strong picture and earned MCD stock a buy status among some stock analysts. “This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company’s strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins, good cash flow from operations and increase in stock price during the past year,” remarked TheStreet Ratings team in giving MCD a buy status.
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