MCD update

The usual, December 2015 and now charts;

mcd dec 28 2015mcd feb 22 2016

The “thrust” corresponds to the size of the mouth of this, four year, triangle. Whatever the count (see previous blog) the first move should be back to the low point of the triangle which is about $80. That would represent a $40 drop, or around 30%. It should not take much longer than a year, the same time it took for the thrust to develop. A good short by way of options. For instance, a 100 Jan. 2017 put, which can be bought for about $4, should be worth >$20 if this happens. That is 5X. Call your broker and see how that goes over! He or she will resist and try to talk you out of it. Just explain that it is actually a lot safer to buy a put for relatively little money than to either own, or short, the full amount of the stock. This is because the outlay for the option in this example is just a little over 3%.

Here is the bigger picture;

mcd feb 22 2016 b