The market today has given MCD another shot at resistance, as they say, "A rising tide lifts all boats". There could still be some upside movement in MCD, the market will largely determine that as MCD didn't make it to today's 5th test of resistance on its own, it had some help from the market.
MCD testing resistance on a daily chart for the 5th time.
This is a trade to think about in longer terms, not so much in its daily moves. You can see a very natural progression of distribution on the daily 3C chart, until it went negative near October. Recently it' gone very negative, but nothing goes straight up or down and just like the false upside breakout in MCD above $80, it would not be surprising to see MCD above resistance if the market is strong and gives it a lift, it doesn't mean MCD and the players who have been selling it are not bearish on the stock, it just means an opportunity to sell at higher prices or short at higher prices is just plain good trading. Keep an eye on this one, I think in a few months from now MCD will be significantly lower.
The interesting thing about MCD and the next short trade, INTC is they are both bellwethers. Remember I said that toward the end of a bull move the cats and dogs rally, we saw that, the rallies are getting less meaningful each week, so the end of the cats and dogs may be near and that also means the end of the uptrend in the market may be near. MCD and INTC are major players and both are looking bad technically speaking.
Here INTC's daily 3C chart also goes through a very natural progression of distribution. The move today is breaking below a bear flag consolidation. This one is also in a leading negative divergence.
Here's an intraday 60 min chart, you can see the decline and the bear flag which has been broken today. There's good longer term distribution on the break of the flag. While the market is looking strong today, these are two, especially INTC that should have seen a greater lift from a rising tide, INTC is sinking into it.
No comments:
Post a Comment