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Trends & Analysis
News

USD falls to 2-week low amid political uncertainty

News

Embrace election volatility with Apple?

News

Apple’s shares slide despite upbeat earnings

News

Week Ahead Preview: 4th of November

News

Microsoft’s shares shorted despite upbeat profits

News

Crude oil gains on decline in US supplies

Asset Watch

Should you munch on McDonald’s?

Thursday, November 2, 2023

Consumers showcased their strong appetite for McDonald’s on Oct. 30, as the fast-food chain outperformed analysts’ estimates on both the top and bottom lines. And with global same-store sales up by 8.8% vs. 7.8% expected, higher menu prices fueled revenue growth. CEO Chris Kempczinski said:
“We’ve tried to be very disciplined on how we have executed those price increases….. And we’re seeing really no change at all in terms of customer acceptance pass-through on pricing, which to me is also an indication that the teams are striking the right balance.”
Moreover, Wells Fargo analyst Zachary Fadem told clients on Oct. 30 that “catalysts are coming” and “we see a solid MCD setup into FY24.”

Thus, while the stock has been under pressure over the last few months, could the Big Mac maker make a big comeback? If so, monitor a key technical level.

 

For example, the stock’s 100-week moving average provided long-term support from January through March 2021, from March through July 2022, and a quick recovery occurred after the breakdown in October 2022. Therefore, as McDonald’s attempts to recoup $265.13, a breakout could be the cue to open a long position.

 

In addition, the stock’s weekly RSI (the black line at the bottom) recently hit its lowest level since the 2020 pandemic-induced sell-off. Consequently, there could be plenty of upside if the metric reverts back to its 2023 highs.

 

So, will it soon be time to order McDonald’s, or will the 100-week MA remain resistance?


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