- Despite recent setbacks, McDonald’s stock has grown 8% this year.
- Price may recover from the current dip and break past the $300 resistance level.
Last month, McDonald’s Corp MCD revealed its plan to enhance its burgers, including improvements to the Big Mac and McDouble.
Prior to the announcement, their stock had reached a record high of $298 per share, but it then started to decline.
After the announcement, the stock continued to decline, with its downward momentum increasing on May 22nd when it fell 2% in one day. The next day price gapped down when the market opened and fell by a further 0.40%.
Identifying potential support levels during a correction is essential to anticipating possible reversal points.
For McDonald’s, the high of 2022 at $281 was the next support level, and interestingly, price reached this significant level on Wednesday, confirming a support base.
Thursday’s market action brought cautious optimism to investors by forming a bullish engulfing reversal pattern.
This pattern indicates a possible momentum shift and often signals a bounce back in the direction of the overall bullish trend. A positive sign for those already invested.
Recognizing a reversal pattern at significant support levels is key for investors and traders. It signals a potential rise in a stock’s price, presenting an opportune moment to position yourself for entry opportunities.
McDonald’s has experienced an impressive 8% increase in value so far this year, indicating a steady bull trend is in play which has the potential to pass the $300 psychological resistance above.
It is typical for McDonald’s stock to experience significant corrections during its trend like the one we are currently seeing. The fact that price is bouncing off support reinforces the optimistic outlook that the stock price can recover from the current decline and create new record highs.
After the closing bell on Thursday, May 9, the stock closed at $285.78, trading up by 1.38%.