McDonald’s stock has hit an all-time high in six of the past eight trading sessions. Here’s how to trade it now.
While the stock market has been trading much better lately, the S&P 500 has struggled to break out of its recent trading range.
Currently near 4,125, the S&P 500 was trading at this mark in January and February, in August 2022 and in May 2022. It’s not been stagnant, but it hasn’t had a clean run over the past 12 months.
On the other hand, McDonald’s stock has been on fire, hitting an all-time high in six of the past eight trading sessions. The burger giant’s stock at last check was 1% higher and is going for its 14th rally in the past 15 sessions.
Not many stocks are hitting new 52-week highs, but McDonald’s is one. Up 9% on the year, the stock is outperforming the S&P 500, which is up about 7.5% in 2023.
From a price-action perspective, this has been one of the strongest names in the market over the past month.
Trading McDonald’s Stock
Daily chart of McDonald’s stock.
Chart courtesy of TrendSpider.com
This morning would have been a great opportunity for active traders had McDonald’s pulled back into the low-$280s. Not only would that have allowed for a retest of the prior all-time high at $281.67, but also for a test of short-term support via the 10-day moving average.
Didn’t happen, though, as McDonald’s stock again pushed to new highs.
At some point, it would be healthy for MCD shares to reset down to short-term support.
Whether that’s via the 10-day moving average or a measure that’s a bit larger — like the 21-day moving average — it will give traders a better risk/reward balance than buying a stock that’s up 14 of the past 15 sessions.
If one of these measures can come into play at the same time as a retest of the low-$280s, then all the better for dip buyers.
Should that area fail as support, then the $275 zone could be on the table.
On the upside, the $295 level is a reasonable target area for longs. But the shares will likely need a rest before climbing that high. That’s why bulls should be looking for a dip to buy.
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