4 Trade Ideas for McDonalds: Bonus Idea

Here is your Bonus Idea with links to the full Top Ten:

McDonalds, $MCD, made a top in October shortly after retracing the full pandemic drop. It pulled back under the prior high and consolidated there nearly 5 months before another push higher. That move stalled at the start of May and it has held in consolidation there since. The move to the top of consolidation Friday comes with the squeezed Bollinger Bands® opening.

The RSI is rising into the bullish zone with the MACD level and positive after a pullback. There is support lower at 230.70 and 228 then 223.50 and 220 before 218.40. There is no resistance above 238. Short interest is low under 1%. The stock pays a dividend with a 2.18% annual yield, and it has been trading ex-dividend since May 28th. The company is expected to report earnings next on July 26.

The June options chain shows biggest open interest at the 230 and 220 strikes on the put side and larger at 230 and 240 then enormous at 250 on the call side. The July options show open interest focused from 210 to 230 on the put side and again much bigger and focused from 230 to 250 on the call side. The July 30 Expiry options are the first chain to cover the earnings report but have just started trading so they offer little information. The August chain shows open interest spread from 200 to 230 on the put side and from 230 to 260 on the call side.

McDonalds, Ticker: $MCD

Trade Idea 1: Buy the stock on a move over 238 with a stop at 233.

Trade Idea 2: Buy the stock on a move over 238 and add a July 230/220 Put ($1.19) while selling the August 260 Call ($0.83).

Trade Idea 3: Buy the July/August 250 Call Calendar ($1.80) and sell the July 220 Put(60 cents).

Trade Idea 4: Buy the August 220/240/250 Call Spread Risk Reversal ($1.40).

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After reviewing over 1,000 charts, I have found some good setups for the week. These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday which heading into the June options expiration week, saw equity markets revving their engines and heating up as they drift around all-time highs.

Elsewhere look for Gold to consolidate around 1900 while Crude Oil breaks higher. The US Dollar Index remains consolidating from the downtrend while US Treasuries started a nascent move to the upside. The Shanghai Composite looks to continue to consolidate the break higher while Emerging Markets stick in broad consolidation over the long term range.

The Volatility Index looks to remain very low making the path easier for equity markets to the upside. Their charts also look strong, especially on the longer timeframe with the SPY leading the way. On the shorter timeframe all 3 are breaking higher, with the SPY at all-time highs. The QQQ is trending higher and less than $1 from its high while the IWM breaks a long consolidation pattern less than $3 from its high. Use this information as you prepare for the coming week and trad’em well.

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.

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