From September 2015, the McDonald’s Corp. stock (NYSE: MCD) has doubled in value, reaching its all-time high, at 200.63, in the beginning of last week. But after hitting that barrier, the share price declined, dropped below the short-term upside support line taken from the low of February 14th and closed the week in the negative territory. MCD managed to stay above one of its key support areas, at 197.00, but if there are no takers of the stock at that price, a further slide lower could be possible, hence why we will remain somewhat bearish for now.
A drop below the above-mentioned 197.00 zone could open the door to the next potential support area, at 193.33, which held the price from falling on May 2nd. Initially, that area might hold the stock, or even allow it to bounce. But if the share price remains below the 197.00 mark, this could trigger another round of selling. If this happens, the slide might force the stock to re-visit the 193.33 obstacle, a break of which could clear the path to the 191.35 hurdle, marked by the high of April 8th and the low of April 17th.
Our oscillators, the RSI and the MACD, are somewhat in support of the above-discussed idea. The RSI, although above 50, has shifted from its highs and is now pointing lower. The MACD is also pointing to the downside by being below its trigger line, even though the indicator is still above zero.
Alternatively, in order to get comfortable with the upside again, we would need to wait until we see a clear push above the 200.63 barrier, which is the all-time high. Such a move would confirm a forthcoming higher high and would place the price into an unchartered territory. We could only assume that the 203.00 obstacle, or the 205.00 level would be good potential zones for the stock to find decent resistance, hence why we will stick to these potential targets for now.
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