McDonald's stock, upside is limited

afarghaly9

Member
Messages
66
Likes
1


Uploaded with ImageShack.us



Uploaded with ImageShack.us

as this final push terminates we should have a move back to arround 60 dollars a share, that would be the first place I would look for ,perhaps, temporary support. Watch it closely over the next month or so, see if any of your setups allow you to short this stock.
 
Last edited:
According to the elliott wave principle once a 5 wave move is complete as visible from the extreme low in the chart you can expect prices to make it back to the wave (4) vicinity which was a triangle, In elliott theory triangles occur before the final move in the wave sequence that strengthens the odds of this interpretation. 60$ is a good area to eye for support which could prove lasting or temperory depending on the price structure the market gives us. Just keep that in mind thats all, we are at typical targets for the final push, it could extend further but if prices sell off rapidly I'm gonna look to short with a minimum target of 60$. If prices do reverse soon as expected see if your setups allow you to short wiether it be a trendline break etc.

Regards,
Ahmed Farghaly
 
Last edited:
and if you own this stock, personally i would cover all stock exposure right now, It seems like the market will experience another deflationary shock. Regardless of what the fed does, all markets, from a wave prespective points towards a revisit of 2008 soon, better be a few months early than a minute late
 
Because the RSI said so innit :)

Seriously, 2q figs beat analyst expectations:
http://uk.reuters.com/article/2011/07/22/idUS125599+22-Jul-2011+PRN20110722

Possible flies in the ointment are asia sales not growing as fast - chinese wage increases, and subway taking over as biggest chain...
http://www.bbc.co.uk/news/business-12673441

I'm not saying the top is in but if we rally higher i see us toping out soon, a decline is inevitable and it will not be because of MCdonalds data rather a flee from risk. a close bellow the purple trendline visible on this chart should be confirmation enough that the move towards the wave (4) green is underway.
 
I'm not saying the top is in but if we rally higher i see us toping out soon, a decline is inevitable and it will not be because of MCdonalds data rather a flee from risk. a close bellow the purple trendline visible on this chart should be confirmation enough that the move towards the wave (4) green is underway.

What risk? - McDonalds is a defensive and by and large got away quite well during 08, ranging most of the year between $50-$66.

Thats why I don't understand this "flee from risk".
McDonalds undoing will be changing eating habits & Subway from where I'm standing.
Even then, I wouldn't rule out MCD evolving to take back market share from Subway by offering a competing and equivalent menu.
What exactly is the flee from risk you refer to if not MCD financials?
BTW, I'm not dismissing your idea of a retrace, far from it, MCD has had a bloody good run :)
 
Global indexes are all at sentiment extremes investers are going to flee due to the general market's bias which should see the dow alot lower by the next few years, I see what you mean by saying MCD remained solid during 2008 but the pattern in which it unfolded (a triangle) it being a continuation pattern, it could have foretold and warned investers that stocks were up for a bounce in 2009 as 98% of them were bears at the march 2009 bottom which resulted in massive loses to most investers, a triangle according to the wave principle is followed by the final move of the sequence which started from the extreme low visible on the chart above. Right now we have the same story but in reverse not 98% but we've had a peak of 94% bulls in april. Under such market extremes wave counts in terms of the elliott theory that support declines should be favored considering the broad possibilities that the wave principle offers. It could continue a little higher MCD, but it will prove marginal relative to the upcoming declines which should take us down to atleast 60.
 
Global indexes are all at sentiment extremes investers are going to flee due to the general market's bias which should see the dow alot lower by the next few years, I see what you mean by saying MCD remained solid during 2008 but the pattern in which it unfolded (a triangle) it being a continuation pattern, it could have foretold and warned investers that stocks were up for a bounce in 2009 as 98% of them were bears at the march 2009 bottom which resulted in massive loses to most investers, a triangle according to the wave principle is followed by the final move of the sequence which started from the extreme low visible on the chart above. Right now we have the same story but in reverse not 98% but we've had a peak of 94% bulls in april. Under such market extremes wave counts in terms of the elliott theory that support declines should be favored considering the broad possibilities that the wave principle offers. It could continue a little higher MCD, but it will prove marginal relative to the upcoming declines which should take us down to atleast 60.

What I'm trying to say is if you're an invester I would not buy at current levels because the market should present a much better bargain in the future.
 
Is the "flee from risk" something to do with the "food" on offer there?

If the general market is going down (investers selling stock exposure - which is what I mean by 'risk' which is what I'm predicting in the near to intermediate future due to extreme sentiment figures and high probability wave structures) then MCD will go down with it. It may not be as severe but it will follow the general market. Hence the risk to reward at current levels are not sound. the market will offer a much better bargain in the near to intermediate future if the bull market shows (in terms of MCD) shows signs that it's going to continue as these declines unfold. and that bargain would be 60$ bare minimum
 
We finally saw the first chink in MCD this week as they announced poor same store sales, especially internationally. I doubt the stock will sell off much but their upside is most likely limited until they improve
 
We finally saw the first chink in MCD this week as they announced poor same store sales, especially internationally. I doubt the stock will sell off much but their upside is most likely limited until they improve

Weakening asian sales have been on the cards since they announced menu price
rises in asia to offset rising food costs and wage increases.
Nothing new there, was expected:

http://www.trade2win.com/boards/gen...donalds-stock-upside-limited.html#post1624004
Because the RSI said so innit :)

Seriously, 2q figs beat analyst expectations:
McDonald's Second Quarter Earnings Per Share Rise 19% on Strong Global Results | Reuters

Possible flies in the ointment are asia sales not growing as fast - chinese wage increases, and subway taking over as biggest chain...
BBC News - Subway overtakes McDonald's as biggest restaurant chain

Obviously China was expected to be weaker, as it turns out Japan was weakest
due to earthquake Tsunami effects on MCD being underestimated:
McDonald's August sales miss; Japan drags | Reuters

Personally, I still think $60 this year is a tall order, I'd go for no more than $70-$75 on any re-trace, then again predictions are usually bo11ox :whistling :LOL:
 
Top