McDonald's Corp. MCD announced Monday that the fast-food giant would exit Russia after a 30-year run. Let's check out the MCD charts and see what investors should do with the shares.
In the daily bar chart of MCD, below, we can see that the shares have rebounded from a March low and then have rolled over in the past four weeks. Now that this anticipated news is out we might see a rebound in prices. MCD is trading just below the 200-day moving average line and testing the 50-day moving average from above. A rally to $250 will put prices back above these moving averages.
The On-Balance-Volume (OBV) line is making a double bottom as it holds its March nadir. The Moving Average Convergence Divergence (MACD) oscillator is at the zero line but narrowing toward a possible new buy signal.
In the weekly Japanese candlestick chart of MCD, below, we can see that the two most recent candles show lower shadows. Lower shadows tell us that traders rejected the lows and suggest there is some buying under the surface. The 40-week moving average line shows a decline to early March and then a recovery.
The MACD oscillator is hugging the zero line and could easily turn upwards.
In this daily Point and Figure chart of MCD, below, we can see a potential downside price target in the $177 area. A trade at $260 would likely improve the picture.
In this weekly Point and Figure chart of MCD, below, we can see the same $177 price target as the daily chart.
Bottom-line strategy: MCD is trying to stabilize in the $242-$240 area. If the broader market averages begin their anticipated rebound, I would look for MCD to improve and creep higher. A rally back into the $260-$270 area could develop in the weeks ahead.
