Tuesday, August 22, 2017

McDonald's (MCD) Trading Near All-Time Highs, Market Outperformer

McDonald's (MCD) is trading near an all-time high, even as the broader market has stumbled in recent weeks.

Quick chart update on McDonald's (MCD), a stock that was last highlighted in our "new all time highs" stock report from April 2017.

At that time, MCD was hitting new highs as the Nasdaq made a record high above the 6,000 point mark. 

Today, MCD is trading just below a new all-time high, even as the overall market has suffered through some late-summer gyrations/shakeouts and pullbacks. This is a sign of the stock's relative strength compared to the broader market. MCD is a stock to watch here.

See the performance chart below: MCD vs. SPY, QQQ.

McDonald's MCD SPY QQQ stock chart performance gains 2017
 

MCD has outperformed the S&P 500 ETF (SPY) and the Nasdaq 100 ETF (QQQ) during the August correction. The stock has moved higher from its July low, even as the indexes lost a bit of ground since late July. 

MCD (+31% YTD) has also outperformed SPY (+10% YTD), of which it is a component stock, and the tech-heavy QQQ (+21% YTD) since the year began.  

These are signs of notable strength. If you scan through your stock charts, you'll be hard pressed to find a lot of stocks holding up this well at the moment. 

Late last week, and over the weekend, I brought up the charts of every US-listed common stock trading over $5. Most of the charts, especially among big-cap retail and consumer stocks, did not look this good. MCD has outperformed the restaurants group and the major indexes.

Does this mean the stock will continue to move higher from here? We can't predict the future based on a price chart, but we can see that McDonald's remains in an uptrend and is showing continued strength since it reached a new high above $133 back in April. This is one of the stronger big cap names in the market.

If the overall market can firm up and move higher (or trade sideways) in the coming weeks, MCD could be a good candidate for a longer-term position trade. 

Note: I have no current position in MCD or the ETFs (SPY, QQQ) mentioned in this article.

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