Wanna know what Thor’s Hammer looks like? Check out McDonalds (MCD) (October 22, 2015)
I want to get into McDonalds ( NYSE:MCD ) here. This is a weekly chart. This is a SCREAMING breakout. I’ve been talking about this before. In fact I didn’t even really follow McDonalds ( NYSE:MCD ) and I was asked a couple of weeks ago to talk about McDonalds ( NYSE:MCD ) on CNBC. They just kind of needed somebody, and they needed somebody that was bullish on McDonalds ( NYSE:MCD ). I looked at the chart and said, “I’m in.” I haven’t had a Big Mac this century but I’ll take that trade. So anyway, I talked about McDonalds ( NYSE:MCD ).
My big deal was that I think them going to an all day Breakfast menu, the other guest had said, “Well that’s an act of desperation”, my sense was, “Hey, it’s an act of inspiration, and that’s exactly what they should do.” The company reports earnings that are “off the charts” good, the stock pops up like this. Now on this weekly chart it looks like it was just one big smooth but dramatic move higher. If you look at the daily chart you see what’s really happened. This is a stock, this is just like a big hammer pattern that’s just hanging out here.
Over at Option Market Mentor we saw this move this morning and I actually suggested not shorting this stock, but trading against a continuation of the move and selling some out-of-the-money calls. Well that turned out not being a good trade. We’ve flipped on that and now should be long some out-of-the-money calls. The reason is because the stock just really didn’t pull back much. I’d have a really hard time buying McDonalds ( NYSE:MCD ) up here at this level, because you’re literally buying it at an all-time high. I actually prefer to be selling things when they’re at an all-time highs.
But this is the chart that matters. My price target on CNBC was 120.00 I think that’s pretty safe, in fact I think that will probably ultimately be conservative. So I think you can own McDonalds ( NYSE:MCD ). I think you’re going to get at least another 10 percent in the stock; and that’s all I have to say about that. Just don’t “Supersize” it, don’t be in really big, but this is a stock that works, it’s just been trading sideways for too long.
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