Good technical signals and a possible breakout for McDonald's Corp.

A possible breakout setup was detected on McDonald's Corp (NYSE:MCD) by our stockscreener. A breakout pattern is formed when a stock consolidates after a strong rise up. We note that this pattern is detected purely based on technical analysis and whether the breakout actually materializes remains to be seen. It could be interesting to keep an eye on NYSE:MCD.

Technical analysis of NYSE:MCD

ChartMill assigns a proprietary Technical Rating to each stock. The score is computed daily by evaluating various technical indicators and properties. The score ranges from 0 to 10.

Overall MCD gets a technical rating of 8 out of 10. Although MCD is only a medium performer in the overall market, the technical picture looks good in both the medium and short term time frames.

• The long and short term trends are both positive. This is looking good!
• MCD is currently trading near its 52 week high, which is a good sign. The S&P500 Index however is also trading near new highs, which makes the performance in line with the market.
• MCD is currently showing a bull flag pattern! A bull flag pattern occurs when prices pull back slightly after a strong rise up. This may be a nice opportunity for an entry.
• When compared to the yearly performance of all other stocks, MCD outperforms 60% of them, which is more or less in line with the market.
• MCD is part of the Hotels, Restaurants & Leisure industry. There are 128 other stocks in this industry, MCD did better than 53% of them.

Looking at the Setup

Besides the Technical Rating, ChartMill also assign a Setup Rating to every stock. This setup score also ranges from 0 to 10 and determines to which extend the stock is consolidating. This is achieved by evaluating multiple short term technical indicators. NYSE:MCD currently has a 8 as setup rating:

Besides having an excellent technical rating, MCD also presents a decent setup pattern. Prices have been consolidating lately. There is a resistance zone just above the current price starting at 254.72. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 252.36, a stop order could be placed below this zone.

How to trade NYSE:MCD?

A breakout could materialize when the stock breaks out to new highs above the current consolidation zone. One could wait for this to happen and buy when this happens. A stop loss could be placed below the consolidation zone.

Of course, there are many ways to trade or not trade NYSE:MCD and this article should in no way be interpreted as trading advice. The article is purely based on an automated technical analysis and just points out the technical observations. Always make your own analysis and trade at your own responsibility.

Every day, new breakout setups can be found on ChartMill in our Breakout analyzer.