Options With McDonalds1. Current Price and Trend Analysis
Price: $293.34.
Trend:
MCD has been range-bound, with a recent bounce off $284 support.
The price is below the 50-day EMA ($299.22) but above the 200-day EMA ($270.36), indicating a mixed trend (neutral to slightly bearish in the short term, but long-term trend is intact).
The recent dip shows the stock testing support, with consolidation and a small upward move suggesting a potential recovery.
2. Key Support and Resistance Levels
Support:
$284: Strong support (tested multiple times in the past, most recently in the highlighted zone).
$270: Next major support near the 200 EMA if the $284 level fails.
Resistance:
$299-$300: Immediate resistance (near the 50 EMA and psychological round number).
$317-$320: Major resistance from previous highs (if the recovery sustains).
3. Indicators
RSI:
At 68.44, nearing overbought territory, indicating upward momentum but caution against entering long positions without confirmation.
MACD:
MACD line is above the signal line, suggesting bullish momentum is building.
However, the histogram shows slowing momentum, meaning buyers may lose steam at resistance levels.
Volume:
Relatively low on recent upward candles, suggesting weak buying conviction. Watch for increased volume to confirm any breakout.
4. Option Trading Considerations
Bullish Case:
If MCD breaks above $299-$300 with volume, consider:
Call Options: Targeting a move toward $317-$320.
Expiry: At least 1-2 months out to allow time for movement.
Strike Price: $300 or $305 (near the breakout level).
Bearish Case:
If MCD fails to hold above $293 or rejects $299-$300, consider:
Put Options: Targeting a move back to $284 or lower.
Expiry: 2-4 weeks out for shorter-term plays.
Strike Price: $290 or $285.
Neutral Strategy (Range-Bound):
If MCD remains range-bound between $284 and $299, consider:
Iron Condor: Sell calls at $300 and puts at $284 while buying protection further out (e.g., $305 call and $280 put).
Credit Spread: Sell options near the expected levels of support/resistance.
5. Final Recommendations
Key Levels to Watch:
$299-$300: A breakout confirms bullish momentum.
$284: A breakdown suggests bearish continuation.
Risk Management:
Watch for upcoming earnings in 16 days, as implied volatility may increase, potentially inflating option premiums.
Monitor volume and price action at critical levels before entering any position.
THIS AINT FINANCIAL ADVICE DO YOU!!
