MCD McDonalds Weekly Chart Negative Divergence

Ronald McDonald is ill, perhaps from a burger. The red negative divergence this time last year created a nice spank down. Note how the MACD line, however, wanted to see another price high (green circle). So price came up for higher highs in 2011. The blue wedge and negative divergence was the first sign of trouble as October ended, and sure enough, price received a slap down as the divergence forecasts. But note the stochastics and MACD line were not negatively diverged and wanted to see another price high again.

We received that price high over the last couple days and now the stochastics are drastically negatively diverged. If you squint you can see that pesky little MACD line still wants to see a mathching or higher high again, but, all other indicators are firmly in negative divergence, and the daily chart is negatively diverged across the board, so a smack down is in order. This is a stock that has made its run and is now topping, will move into a sideways churn, perhaps to map out an H&S topping pattern, and then roll over. There is no reason to own this stock anymore, technically the chart says the end is at hand.

An initial pull back from the current negative divergence should easily print in the 87-88 support area. Projection is sideways to sideways lower for the weeks and months to come. Some sideways churn thru 92-98 may occur in the weeks ahead as MCD tops and rolls over. This information is for educational and entertainment purposes only. Do not trade based on this information. Consult your financial advisor before making any investment decision.