Fast Food = McDonalds = Wrong!
- Posted by Greg Harmon
- on December 5th, 2012
This time of year there is a hurried bustle in the air. Gift buying everywhere. Sure you can buy all of you gifts for the holidays on line but what fun is that. Some people actually like to go shopping. The crowds at the malls, all the music, everyone is jolly. And of course if you are out all day you are gonna need some nourishment. So it is also the time of fast food. And when you think of fast food you think of McDonalds, $MCD. But you know what, traders are not. Take a look.
McDonalds, $MCD, peaked just under $100 in January and has had a hard time since. a brief push higher led to a double top in September and October before new lows into November. Rising off of that low it is already showing signs of tiring with an Evening Star Candle Wednesday, accompanied by a Relative Strength Index (RSI) that is turning back at the mid line and a Moving Average Convergence Divergence indicator (MACD) that is fading. Combine that with Bollinger band that are restricting any further upside and the recipe is for a pullback. Instead Burger King, $BKW, and Wendy’s/Arby’s, $WEN are where traders are focusing.
Burger King, $BKW
Burger King, $BKW, re-emerged as a publicly traded company in June and dropped 20% over teh next 2 months. Finding a bottom it has been stair stepping higher, and the steps have been accelerating. It is currently consolidating in a bull flag and trying to peak over the top. Should it get over 17.25 there is a Measured move higher to 18.00 on the next step. The RSI is technically overbought, but barely and moving sideways. Look for a move over 17.25 as the next entry.
Wendy’s/Arby’s, $WEN, had been in a down trending channel from February until it broke out above it the day before Thanksgiving (definitely not a coincidence). It consolidated on the move over the 200 day Simple Moving Average (SMA) and is now testing new higher highs. The RSI and MACD support more upside and a move over the July highs at 4.80 could get it rocking. Use that as your entry.
Join the Dragonfly Capital Views Premium Membership
Sign up here to get deeper analysis and nearly 50 trade ideas every week.
If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.blog comments powered by Disqus
Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
- Premium Earnings 2-9-16
- The Head and Shoulders in the Nasdaq Looms Large
- Stalking an Entry on Constellation Brands
- Premium Earnings 2-8-16
- Top Trade Ideas for the Week February 8, 2016: Bonus Idea
- Top Trade Ideas for the Week of February 8, 2016: The Rest
- Top Trade Ideas for the Week of February 8, 2016: The Rest Premium
- Top Trade Ideas for the Week of February 8, 2016: The Best
- SPY Trends and Influencers February 6, 2016
- Macro Week in Review/Preview, February 5, 2016