McDonalds (MCD) is one of the most iconic brands around the world. I can remember the first McDonald's in my neighborhood back in central New Jersey in the late 1950's. Today we have the same yellow arches but lots of changes to the menu and prices are a big shock.
The local McDonald's three miles from my house in Delaware is pretty busy all day long but I suspect higher prices will begin to bite into traffic in the new year. This conclusion does not come from any fancy channel checks or surveys but from the price charts and technical indicators.
Let me show you what I'm seeing.
In the daily bar chart of MCD, below, I see a choppy sideways to slightly higher trading pattern the past year. The shares have slipped below the rising 50-day moving average line but remain above the rising 200-day moving average line.
The trading volume shows an increase from September and that is a little concerning. Active volume on the September decline (bearish) is followed by active volume on the October rally (bullish) and on the subsequent correction lower (bearish).
The On-Balance-Volume (OBV) line moved sideways from March to October and then only made a modest rally in November before rolling over. The movement in the OBV line does not show clear signs of aggressive buying and I find that to be a problem.
The Moving Average Convergence Divergence (MACD) oscillator is now moving below the zero line for an outright sell signal.