Technical Analysis – McDonalds stock reaches new record high; hits upper boundary of ascending channel

Melina Deltas, XM Investment Research Desk

McDonalds stock price hits a record high of 215.85 last Thursday, meeting the upper boundary of the long-term ascending channel in the daily timeframe.

The 20-day simple moving average (SMA) helped the bulls to retake control, while the positive momentum in the RSI suggests the bullish party is not over yet for the stock. However, the MACD oscillator is slowing down below the trigger line.

The peak at 215.86 could potentially work as nearby resistance should the price continue the rebound on 206.35. Nevertheless, it would be more fascinating to see a rally above the upper boundary of the channel, towards the 261.8% Fibonacci extension level of the downward move from 190.72 to 169.00 around 226.16.

Alternatively, the 20-day SMA at 210.90 could come be tested if selling pressure starts. If the line proves easy to get through, then the 206.35 support could come into focus. More declines could open the way for the 23.6% Fibonacci retracement level of the upleg from 153.00 to 215.86 near 201.00.

To sum up, the market is expected to hold bullish in short- and long-terms despite the weak signal in MACD.