MCD Short (pt. 2)The 50 SMA has crossed the 20 SMA for what appears to be setting up a minor "death cross". Typically when this happens, a new trend is about to begin and in this case we are heading to the downside. The Fibs lining up with previous supports or resistance usually confirm the Fib Retracement and the 1.618 seems to align perfectly with the $236 support. Shorting until then.
Not financial advice
Trade ideas
McDonald's | Fundamental AnalysisAs many people know, McDonald's recovery is now at its peak. Last week, this fast-food titan announced its Q4 earnings results, which include record sales growth as the company recovered from the 2020 pandemic recession. The chain is becoming much more profitable, thanks to a combination of cost-cutting and price increases.
Let's take a look at some key findings from the fourth-quarter report to gauge the company's state of affairs.
Investors feared that the latest variant of the coronavirus might hinder McDonald's growth recovery, but those fears proved to be exaggerated. Comparable-store sales were up 10.8 percent on a two-year basis, smoothing out fluctuations associated with temporary store closures. This result represents an acceleration from the previous quarter when revenues rose 10.2% on this basis.
Of course, the U.S. market has slowed a bit, with two-year numbers down to 13% from 15% in the third quarter. However, McDonald's is still showing attendance growth and growth in average spending per visit in all of its key geographic regions. CEO Chris Kempczinski, in a press release, called the 2021 results, which include McDonald's fastest growth in U.S. history, "a truly exceptional result." The chain's global sales for the full year rose 21 percent to $112 billion.
Of course, McDonald's has not escaped a sharp rise in inflation, which has hit food ingredients especially hard in recent months. For example, wages rose more than 10 percent for most of 2021, and food costs rose about 6 percent.
The chain has more than offset these pressures by raising prices, aggressively cutting costs, and increasing efficiency through more takeout and delivery sales. In fact, operating profit increased 17%, outpacing overall revenue growth.
This success has allowed operating margins to soar to 42.4% of sales from 36.7% a year ago. McDonald's is now showing record profitability, even as costs across the business are rising rapidly. Operating profits for the full year topped $10 billion, a new record.
Kempczinski and his team are watching for some major potential challenges for fiscal 2022, including continued pressure to pass on higher food costs to consumers. Some key markets, such as China, face further COVID-19 restrictions. And competition in home food delivery remains as fierce as ever.
But last year's results confirm that this restaurant chain has several world-class assets that allow it to thrive in almost any market environment. It's also a testament to the flexibility of its massive fast-food platform to cater to a wide range of tastes, whether premium drinks and sandwiches or inexpensive meals.
As a result, investors have every reason to expect positive returns from owning McDonald's stock. Of course, it's unlikely that the company will ever repeat its 2021 performance when its revenues rose 14% after a downturn in 2020.
But the restaurant chain has regularly gained share in a huge global market and boasts some of the highest margins and cash flow in the industry. These factors, as well as a growing dividend, should help shareholders continue to outperform the market by owning these shares.
MCD Earnings Musk eating a Happy Meal if McDonald's accepts DOGEElon Musk said he would eat a Happy Meal on TV if McDonald's started accepting Dogecoin as a form of payment.
Even BurgerKing, who had joint marketing campaigns with Dogecoin before, commented on the tweet.
MCD McDonald's global sales increased 12.3% in Q4, +7.5% in U.S. sales
but:
Revenue: $6.01 billion vs $6.02 billion expected
EPS: $2.23 vs $2.33 expected
My scenario is a bounce from this support, forming a Head and Shoulders Bearish chart parttern with a price target around $229.
Consumer discretionary stocks are doing fine. McDonald's exampleHi everyone,
As millions of retail crypto and options speculators lose their savings, McDonalds Corporation is rubbing its hands with a hideos grin. "Ah, yes, millions of fresh employees, just what I need" .
In all seriousness, consumer discretionary sector as a whole was obviously contracting with the broad market. However, not quite at the same pace.
NYSE:MCD stock has seen a maximmum drawdown of 8.7%, whereas S&P dropped 12% from the top.
Though if you look for a safehaven amidst the increased volatility, it is much safer to buy consumer defensive names, such as Campbell Soup ( NYSE:CPB ), Kroger NYSE:KR , Procter&Gamble ( PG ), etc.
All these names performed really well this month compared to the general market.
McDonald's is a cyclical consumer stock, which means it will outperform the market during the economic expansion period.
And when is this going to happen?
My opinion is the following:
1. Market is in turmoil, so the Fed is not going to raise rates.
2. Inflation will slow down. Inflation is connected to the supply chain issues, not to the Fed printing money (because in reality they did not print anything, but that's another topic for discussion).
3. All Covid measures are going to be cancelled this year, as the global context on taming this virus started to shift.
The above reasons lead to a major economic expansion and another consumer discretionary stocks boom later this year.
McDonalds happens to be one of them.
Oh, yeah, also check my levels on the chart.
As always, trade wisely and good luck!
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Disclaimer!!!
This is not financial advise.
Short MCDMCD has been on a tear since COVID and rightfully so. With restaurants shutting down and consumers unable to go in to restaurants, the best alternative was fast-food. However, with states trying to get back to a semblance of normalcy, fast-food chains are losing that customers to sit down restaurants (MCD included). MCD has reached a favorable target for me to short it and there is a gap to the downside at $250 that still needs to be filled. Any puts ITM or slightly out of for the next few weeks are favorable; I would even short earnings up here.
Not financial advice
MCD might be looking for a 3th waveI chose to go with a 1-2-1-2 as I believe it's the pattern that suits it more, either of the 1 waves look impulse whereas 2 look choppy and sideways (Flats). MACD broke both trendlines giving us a strong bullish signal and on RSI seems that might try to break it's trendline. The late move upwards seems to have an internal 5 waves and the correction already made 3 moves to the downside followed by a really strong move to the upside again, we could assume that correction is over and we are going up again, breaking the previous high would be a confirmation.
MCD might be looking for a 3th waveI chose to go with a 1-2-1-2 as I believe it's the pattern that suits it more, either of the 1 waves look impulse whereas 2 look choppy and sideways (Flats). MACD broke both trendlines giving us a strong bullish signal and on RSI seems that might try to break it's trendline. The late move upwards seems to have an internal 5 waves and the correction already made 3 moves to the downside followed by a really strong move to the upside again, we could assume that correction is over and we are going up again, breaking the previous high would be a confirmation.






















