Long

McDonald’s is in love with the 50 monthly moving average.

Updated

This is the only TA you need for McDonald’s. It’s a consistently strong stock that has only had two red yoy returns in 20 years, and in those 20 years its average drawdown is 12%. We dropped 14% from the year at 288 to 247 and bounced near the 50 MA. I expect this to consolidate for several days or weeks potentially but price target is 300 before EOY.

Positions:
131 shares @ 259/share
20 contracts 300c March 2025 @ 4.74/ea

Note

I cannot believe how bullish we ended this week and I am beyond happy for it.

We closed above the following:

1 hr 200 MA
Weekly 200 MA

And we have formed a giant engulfing daily candle.

I have also added to my position when we had that melt down from 261-258 as well as some calls at 254

07/19 270 C 7x
09/20 300c 27x

And I also bought 30 more shares

Trade active

Today was a disappointing end to a good start of the week. I honestly expected us to break past 260 at some point but instead we got a huge sell off.

It wasn’t just MCD. Both SBUX and DIS, large consumer sector pillars, also took a hit.

We are still looking decent on weekly and monthly time frames. I would not be concerned just yet. If we drop below 250 I’d consider sizing out of the position with a loss and attempting to average back in at a lower cost.

But the bounce from 253.8 to 255 was much needed confirmation of some strength and support. For now we wait and hope next week we get a strong open and finally push over 262.

Do keep in mind earnings is this month and McD has projected a strong earnings QoQ.

Trade closed: stop reached

I forgot about posting this idea, but awhile back I had closed the trade at 256. I wish I would've held.

My reasoning for that was that when I entered this trade, the 50 monthly moving average and the 200 weekly moving average was a very important SL level for me.

When we had the pump to 262, I was up big on the trade. I didn't take profit and thought we might see a break through resistance and continue onward.

Instead I sold at 256 for a loss and it continued plummeting to 242. I was relatively relieved because I do not think I would have handled that well and would've likely sold for an even bigger loss.

But what I was not expecting was for the stock to a) rally after a bad earnings report and b) continue rallying further during one of the worst tech sell offs in history.

Overall, it just proved what I told myself in the beginning. Mcdonalds WOULD find a way to 300. It might not be too late to re-enter, but I have been in other trades and was able to recoup the loss I made from the 256 sell and am now tracking to new highs for my portfolio.

I hope whoever followed this trade and had the conviction to average in and up made some money. Cheers.

jgdub

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