With the massive sell off in the US markets beginning to show signs of slowing and a return to more regulated trading, many stocks are now looking cheap, and one such is McDonald’s. Like many others, this has collapsed under the onslaught, but over the last three days, we have seen some strong volume signals which suggest the stock is now being accumulated and preparing for a bullish rally longer term. On Tuesday we had the first hammer candle under extreme volume, and this was followed on Wednesday with a repeat performance at a lower level on a similar volume. Finally yesterday the wick to the lower body signalled further buying which then propelled the McDonald’s higher to close at $149.50 on the day. It’s likely we will see congestion as more selling pressure is absorbed before a longer-term recovery begins, but certainly, one to have on the radar amongst many others!
I wrote this before the market open and see it has opened gapped up and the good news is there is also a massive hammer candle on the week on extreme volume. Expect a dramatic day to end another wild trading week.
By Anna Coulling
Charts from NinjaTrader and indicators from Quantum Trading
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