Trends are close to everything, and technical analysis is the sum of all expectations, dreams and hopes. If you understand some technical analysis you can reduce your losses and narrow down the best exit and entry points. Nothing is random, and for us it is all about probabilities as we scan the entire market.
SHORT TERM COMMENTARY: McDonald┬┤s Corp. [Tuesday 17 Oct. 2017]:
Buy Candidate ( 6.20)
McDonald┬┤s Corp. is up by 0.55% yesterday from USD 164.54 to USD 165.44 In the last 10 days the price of McDonald┬┤s Corp. has been rising in a total of 9 out of 10 days, and is up by 5.19% over the past 2 weeks. Volume also increased last day along with the price which is positive technical sign, and in total there was traded 0,07 million more shares than the day before. In total there were bought and sold 1,33 million shares for approx. USD 220,33 million.
3 MONTH TREND
McDonald┬┤s Corp. has broken the weak rising short term trend up and even stronger raising rate are indicated. On reaction back there will be support on the roof on the current trend broken, which is USD 164.97, a level that may pose a second chance to hit a runner. According to fan-theory USD 174.9 will be next possible trendtop level and thereby pose a resistancelevel which may not be broken on first attempt.
Only positive signals in the chart today. McDonald┬┤s Corp. holds buy signals from both short- and long term moving averages. In addition there is a general buysignal from the relation between the two signals where the short term average is above the long term average. On corrections down there will be some support from the lines at USD 162.75 and USD 156.26. A break down bellow any of these levels will issue sell signals. A buy signal was issued from a pivot bottom point at Tue. 26 September 2017 and this indicates further gains until a new top pivot has been found. Volume is rising along with the price. This is considered to be a good technical signal.
RELATIVE STRENGHT INDEX (RSI)
RSI14 is 88 and the stock is extremely overbought on RSI14, but may as well continue to gain. Some stocks do their best performance while being overbought, but it is very seldom RSI remains so high for a long time without short corrections. Risk has therefore increased and larger daily movements can be expected for the next couple of days.
SUPPORT AND RESISTANCE
On the downside the stock finds support just bellow today's level from accumulated volume at USD 159.52, USD 156.23 and USD 153.68 There is no resistance from accumulated volume above today's level and given the right condition the stock may perform very well in the next couple of days.
With no support from accumulated volume bellow todays level the risk is increased as drop bellow the support at 159.52 may give a very hugh drop in the stockprice.
This stock is usually traded at good volume, and with minor daily changes the risk is considered to be low. Last day they the stock moved USD 1.27 between high and low and this equals 0.77%. For the last week the stock has had an daily average volatility of 0.99%.
The stock is very overbought on RSI14 (88). Normally this will pose a good selling opportunity, but since the stock has broken the trend up the chance for a major correction due to high RSI is very little as the stock will find support at the trend broken.
McDonald┬┤s Corp. holds several positive signals and have broken the weak rising trend up. As is the stock are in a very good technical shape. We therefor consider to be a good choice at current levels and are expecting further gains during the next 3 months.
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