4 Trade Ideas for McDonald’s: Bonus Idea

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

McDonald’s, $MCD, made a high in October and the pulled back to the 100% retracement of the pandemic drop later that month. It held there in consolidation for over 4 months before rising off the 200 day SMA in March. It continued to a higher high at the start of May and then settled in a range around the October high. It broke the range to the upside late in July but could not hold and fell back. This resulted in a higher low though and it has reversed to the upside again.

It ended last week at resistance with the RSI rising in the bullish zone and the MACD positive and turning back higher. There is resistance at 239 and 242 then 244 and 246.50. Support lower comes at 233.50 and 229.50 before 228 and 224. Short interest is low under 1%. The stock pays a dividend with an annual yield of 2.16% and will start trading ex-dividend on August 31st. The company is expected to report earnings next on November 8th.

The August options chain shows the open interest focused at 235 and 232.50 on the put side, but at 240 and then 250 on the call side. In the September chain it is spread from 230 to 200 on the put side and biggest at 240 and 250 on the call side with size at 210 as well. The October options are focused from 220 to 240 on the put side but small, and from 230 to 260 on the call side. Finally, the December chain is the first to cover the earnings report and shows the biggest open interest at the 230 then 220 put strikes. The December 240 are the biggest open interest on the call side.

McDonald’s, Ticker: $MCD

Trade Idea 1: Buy the stock on a move over 239 with a stop at 235.

Trade Idea 2: Buy the stock on a move over 239 and add a September 230 Put ($1.89) while selling an October 250 Call ($1.79).

Trade Idea 3: Buy the September/December 250 Call Calendar ($3.85) and sell the October 220 Put ($1.65).

Trade Idea 4: Buy the December 220/250 bull Risk Reversal for 25 cents.

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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 noted equity markets were a mixed bag this week as the market moved into the low volume dog days of August.

Elsewhere look for Gold to continue its bounce in the pullback while Crude Oil consolidates in a tight range. The US Dollar Index continues to consolidate after the move to the upside while US Treasuries may be resuming their uptrend. The Shanghai Composite looks to consolidate while Emerging Markets continue to pullback toward long term support.

The Volatility Index looks to remain very low making the path easier for equity markets to the upside. The charts of the SPY and the QQQ both look great on the longer timeframe with the SPY also looking good for more highs in the short run. The QQQ looks to continue to pause and digest at its highs. The IWM continues to look like the party pooper, stuck in a long flat consolidation that is nearing 8 months long without any change in sight. 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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