McDonald is not a small cap stock. A 40% rally is a huge move in a stock that has a market cap of now $124 billion.
I shared the BUY signal in the stock in my October 2016 post. This is what I shared back then
The stock has built a base at $110 and if McDonald confirms that the business momentum is intact - then expect strong rally ahead. The stock needs fresh trigger to rally now. The chart:
Here's what has happened to McDonald Chart since then
As you can see in the chart above - How the base helped the stock to make a solid move in following months. McDonald broke out above 95 in CY2015 and post breakout -stocks do this thing - they form a base and then rally. McDonald Good days started post its announcement of "All day Breakfast" and breakout > $95
Are people returning to McDonald stores? The earnings report says YES to eat chicken sandwich and all day breakfast. pic.twitter.com/uomZPzxTKI
— Deepak Singh (@smarket) October 23, 2015
The stock broke out in October 2015 but the real opportunity came a year later in October 2016.
There is a reason why traders celebrate breakouts because it opens up new opportunities and gives sufficient time. Here are few more examples of how Charts gave an advance signal before these large stocks made 40-50% move.I hope you found the above case study interesting and how Price Action can help one make a sound investment decision just when it matters. Yes I call it Science of Stock Price Action
Science of Stock Price Action
If you find my work interesting - I will encourage you to buy the book and access Premium Case Studies. The idea is to demonstrate live how patterns unfold and work. They succeed, they fail but the whole process is real fun. I invite you to be part of it.
Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purpose. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers