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News

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News

Does Apple have more room to run?

News

Gold spikes to new highs on Fed remarks

News

GBP/USD price may correct lower

News

Goldman Sachs’ stock surges on upbeat Q2

News

Caution ahead of Netflix’s earnings?

Asset Watch

Munch on McDonald’s while Big Tech corrects?

Tuesday June 25, 2024

Big Tech finally showcased weakness on Jun. 20-21, as NVIDIA and Apple suffered mightily alongside weak S&P 500 seasonality. If the corrections continue in the days ahead, McDonald’s could be a nice place to hide as the drama unfolds.
The fast-food giant unveiled a new $5 Meal Deal in the U.S. on Jun. 20 that includes a sandwich, fries, nuggets, and a soft drink. “Free Fries Friday” also grants customers free medium fries with every $1 purchase every Friday.
As diners become more value conscious, McDonald’s USA President Joe Erlinger said, “They’re looking for even more great value from us, and this summer that’s exactly what they’ll get.”
And with investors’ appetite for the stock also improving last week, the risk-reward could be attractive if it maintains its recent strength.

While McDonald’s is down by more than 10% in 2024, the stock has support near the January and October 2023 lows (the horizontal white line). Ironically, the pattern looks very similar to its M logo.

 

On top of that, the Jun. 21 rally allowed the stock to close above its 200-week moving average (the blue line). The key level was resistance two weeks ago, and if it holds, could be a sign that a new uptrend has begun.

 

You should monitor the price action in the days ahead, and a long position is justified when the stock trades above its 200-week MA.

 

So, does McDonald’s look like a comeback candidate, or will Big Tech regain its market leadership over the next few weeks?


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