MCD rallying into resistance zone

BATS:MCD   McDonald's Corporation
MCD is rallying back to the price level where the news was announced back in early March that the CEO was going to retire in June. Since that time, KO (Coca-Cola), BUD (Budweiser) and other global consumer non-cyclical stocks have made moves higher and the stock market has moved back up as well. MCD is rallying to catch back up from the bad news, but you can see on this chart that there was a meaningful seller that was aggressive at the 101 level and would sell down to the 99 level on three different occasions.

You can also see that the new low in March was a washout of the previous low and set the tone of this stock into a "downtrend" which is now reversing and yet this "higher-high" is putting MCD right into "supply" where I think there is a low-risk entry on the short side.

I am only looking for a retest of the 96 level where the lowest range occurred in this last decline. I view risk normally as 3 average ranges. The 1 year avg range is $1.08/share. It looks like this rally may have some momentum to lift it back up a little further into the green circle on the chart.

By: Technical Tim, April 3, 2012 1:28PM EST

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