Are you buying the Golden Arches? Here is one approach. (August 08, 2012)
MCD DJ-30
Good evening. Quick thoughts here on McDonalds ( $MCD McDonald’sCorporation ). Yesterday after hours, company announced earnings, let’s just say they were less than a stellar, they had flat revenues, which is totally new for the old golden arches. So what’s the reason for that ? Maybe it’s increased competition from Chick-fil-A or some of these other on fast food places; maybe there’s competition there, maybe people like Starbucks ( $SBUX Starbucks Corporation ) coffee better after all. Europe, Asia all that stuff the economies aren’t doing that well so the bottom line is maybe McDonalds ( $MCD McDonald’sCorporation ) is not the bargain that you might have thought it was after this kind of move lower. Also at the same time by the way, the Dow Jones was up today like barely, but it’s overbought looking to me like it’s right for some kind of a pullback; so McDonalds ( $MCD McDonald’sCorporation ) is a Dow component. If the Dow does start rolling over do you really think McDonalds ( $MCD McDonald’sCorporation ) is going to be bought big-time at this level? Happily we don’t have to make that prediction, instead we can just see okay well there was support so we’ll look here, looks to me like maybe this is support as well, look at the volume, trading volume was massive, stock traded down, closed near the high of the day. So if you want to be long McDonalds ( $MCD McDonald’sCorporation ) you just keep the stop right there and that’s all she wrote. The problem though is, if you’re not really looking at the chart you can see this is a stock that’s been topping for really most of the year this is a breakdown, there’s no question about it in my mind, this is a breakdown; so with this being the new box for McDonalds ( $MCD McDonald’sCorporation ) like right in there, if you’re buying look to sell at about $93.00, but also look to keep a tight stop right about there and you’ll be fine. This is what I need to see, I’m just not interested in buying a stock that’s in a prevailing downtrend like this, nor would I be interested in shorting McDonalds ( $MCD McDonald’sCorporation ) because for one thing it just kind of seems un-American to short Ray Kroc, but also I think McDonalds ( $MCD McDonald’sCorporation ) is a good franchise and if you’re looking for shorts there are many, many easier short sales out there than McDonalds ( $MCD McDonald’sCorporation ), so for me I say you just stay away from the whole thing. Okay, members get to the Strategy Session I’ve got a lot of stuff for you, actually not that many stocks, but there are some that we definitely need to look at. Okay, I’ll see you there. Free Chart