MCD closes lower for the 4th day in a row
McDonald's Corporation (MCD) Technical Analysis Report for Nov 20, 2020 | by Techniquant Editorial Team
Moving lower for the 4th day in a row, MCD ended the week 0.38% higher at 214.09 after losing $1.02 (-0.47%) today, but still slightly outperforming the Dow Indu. (-0.75%). Trading $0.82 higher after the open, the stock was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (MCD as at Nov 20, 2020):
Friday's trading range has been $1.59 (0.74%), that's below the last trading month's daily average range of $4.99. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for MCD.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. Additionally, one bearish candlestick pattern matches today's price action, the Bearish Spinning Top. The last time a Bearish Spinning Top showed up on November 13th, MCD actually gained 1.62% on the following trading day.
After having been unable to move lower than 213.33 in the prior session, the share found buyers again around the same price level today at 213.62.
Although still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Buying might speed up should prices move above the close-by swing high at 217.84 where further buy stops could get activated. Selling might accelerate should prices move below the nearby swing low at 213.33 where further sell stops could get triggered.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "4 Consecutive Lower Closes" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for McDonald's. Out of 54 times, MCD closed higher 59.26% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 59.26% with an average market move of 0.75%.