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December 7 Chart of the Day - McDonald's

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Global fast food giant McDonald's (MCD) is making headlines today by announcing it's launching a new concept named CosMc’s, an Alien-Inspired Restaurant Serving Slushes To-Go... whatever that means.

Strategically, the company is positioning the new endeavor as a beverage focused multiple drive-through destination aiming to compete with Starbucks and other takeaway drink chains.  The new concept will have also have a limited food menu.

Well that's great and sounds dandy but we wanted to review the chart from a price action technical analysis perspective and cut through all the marketing hoopla.

On the monthly chart we can see that price is at a potential decision level in the form of a bear 78.6% retracement level.  Essentially, this could be the last level for the bulls to get through before retesting the $299.35 all time high (ATH).

Trading roughly at $287 earlier today price has been flirting with the bears last Fibonacci line of defense most of this week.

Maybe the company was hoping this announcement could usher in a pop up for its stock price but so far nothing doing.  But, should price decide to power up to try and make a new higher high then $310-$320 range or possibly higher could be upside targets.

If price were to make it up to that area on the chart then it would be going through what is referred to as "price discovery" because there isn't historical price action at those levels to analyze.  Using the math behind Fibonacci extensions we can project (not predict) potential levels.

On the weekly chart we've incorporated additional support/resistance levels as well as another bull Fibonacci to identify potential pull back targets in the event price decides to fall from its current levels.

From this, both investors and traders can formulate their respective plans.

So what's next? 

We don't make predictions...

Nobody knows for sure but using these 5 price action tools traders and investors can develop levels of interest in both directions.

  1. Support/Resistance
  2. Trend
  3. Fibonacci 
  4. Supply/Demand Zones,
  5. Change Control Zones

Take a look at the charts and let us know what you think.  

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