MCD, McDonalds Corp.

mcd oct 2011 l mcd oct 2011 s

Mc Donalds has behaved almost like a bluechip. It did not drop as we thought it might, but then it did not progress much at all for the past4 months or so. Long –term this stock is trading above it’s 3 year old channel and is doing a “throw-over”. These come at the end!

From the short-term chart a good case could be made that the stock formed a triangle. This would be wave 4 of 5. The “measurement for this triangle suggests a top at around $94 at best. So now you have $2 or so to the upside and $42 to the downside. The big triangle wave 4 has it’s base at the $50 level and this is almost certainly where the stock will go once it starts it’s trek down. That is, by the way, also true in a continuing bull market.

If odds of 2 to 42 are appealing, then stay with the stock, all others should exit. This , I think, applies regardless of the count. It is a simple matter of being prudent or smart and applying the buy low/sell high principal.