MCD McDonalds Monthly Chart; Overbot; Rising Wedge; Negative Divergence; Upper Band Violation; MCD Likely Printed Multi-Month and Multi-Year Top

For Mickey D's, MCD, you can buy their Chicken McNugget's but don't buy their stock. The RSI and stochastics are overbot agreeable to a pull back. The red rising wedge pattern is bearish. The indicators are in universal negative divergence. The top 2 months ago is likely a historic top for McDonalds, a multi-month and multi-year top.

The bulls are pumping it last week with the overall market euphoria but other than some chop for a week or few ahead, McDonalds is about to soil itself. A move back to the middle band at 163, perhaps for starters, is on the table and likely over the coming month.

The ADX line indicates that MCD is experiencing a strong trend higher. The trend was strongly higher in 2011 through 2014 (purple box) but in 2015, McDonalds was slipping away. Then, bingo. MCD begins rallying again in 2016 to present and the ADX is above 30 indicating a strong trend higher. However, note that the ADX is negatively diverged over the last year. If the rally was strong, the ADX would be printing higher than that prior high at 62-ish. So price is moving higher, and the trend higher for the last three years is strong, but the strength in the trend is diminishing.

Check out those tight standard deviation bands in 2015. You knew a big move was on tap. That tube of toothpaste was squeezed in tight, the cap flies off, and the toothpaste squirts higher. Tight band squeezes tell you a big move is on tap but they do not predict direction. The tight bands could have squeezed price lower but in 2015 it was up, up and away. Ronald McDonald was celebrating as the bacon cheeseburgers flew off the shelves into obese American stomachs.

Keystone does not have a current position in MCD but will be shorting it going forward. In general, short all rallies in MCD. Timmy Trader, the intern on the trading floor, asks, "Ya want some fries wit dat short?" This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.