Shares of McDonald’s Corporation (NYSE:MCD), while higher by about 34% for the year, until earlier this week spent a few months in a consolidation phase. Although this stock, like most others out there at this juncture of the broader stock market, is at risk of a pullback if the broader market takes a seasonal dip, into year-end MCD stock could be a source of another round of profits for traders and investors.
Note that with earnings season kicking off today, from a trading perspective it is important to circle any given company’s earnings release date.
To wit, McDonald’s is scheduled to report its next batch of earnings on Oct. 24, which is to say that “trading positions” in my eye should be closed before these reports and reevaluated for new trades once earnings have passed.
MCD Stock Charts
Moving averages legend: red – 200 week, blue – 100 week, yellow – 50 week
When I last discussed MCD stock on June 6, I offered a cautious tone and called the stock near-to-intermediate-term overbought. Although the stock did see another 3%-4% of upside to the upper end of its trading range over the past few months, largely speaking it was the right call in June to take near-to-intermediate-term profits in the stock.
In fact, looking at the longer-term weekly chart not much has changed since June, i.e. MCD stock in my eye remains grossly overbought in this time frame.
To be clear, this does not mean the stock can’t move higher in the near-to-intermediate term, but allocating fresh long-term capital in a meaningful way at this juncture in MCD stock in my eye remains a low-probability trade.