Should McDonald's Be on Investors' Menu?

Let's see how the charts are positioned after earnings Monday.

In Jim Cramer's game plan for this week he was bullish on McDonald's (MCD) , Plug Power (PLUG) , Beyond Meat (BYND) and International Flavors & Fragrances (IFF) . McDonald's reported strong third-quarter results Monday morning and the stock is higher in early trading.

We were not a fan of McDonald's charts back on September 25 and wrote that, "Make your shares of MCD "to go" for the next several weeks. Avoid for now." 

Let's check how the charts are positioned now.

In the updated daily bar chart of MCD, below, we can see that the shares are higher on the day but off their best levels and below the opening. Prices gapped above the flat or neutral 50-day moving average line but could finish the day back below the average line. (It's that kind of day.) Prices are above the flat 200-day moving average line.

The On-Balance-Volume (OBV) line could be turning upward again but has been in a sideways pattern since the middle of September. The Moving Average Convergence Divergence (MACD) oscillator recently moved below the zero line for a sell signal but that could get reversed soon.  

 

 

In the weekly bar chart of MCD, below, we can see that the shares are in an uptrend from the March low. Prices are above the cresting 40-week moving average line.

 

The weekly OBV line has been improving since June and the MACD oscillator is still bullish but ever so close to crossing to the downside for a take profits sell signal. 

 

 

 

In this daily Point and Figure chart of MCD, below, we can see the rally Monday morning but the chart still suggests a downside price target in the $191 area.  

 

 

Bottom-line strategy: Monday is not one of those days to close your eyes and go long as it comes AFTER a long rally from March. 

 

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