Patrick Martin
1 min read
In This Article:
While a third of Dow stocks boast double-digit gains for 2025, McDonald's Corp (NYSE:MCD) has been on the sidelines, treading water above its year-to-date breakeven level. And while most stocks frenetically rallied in the second quarter, MCD is nursing a 7% deficit in Q2. The upside is that this pullback has the blue-chip fast food stock testing a historically bullish trendline on the charts.
MCD is within one standard deviation of its 320-day moving average. For the purpose of this study, Schaeffer's Senior Quantitative Analyst Rocky White defines that as the equity trading above the moving average for 80% of the time over the past two months, and closing north of the trendline in eight of the last 10 sessions.
Per White's data, nine similar signals have occurred during the past three years. McDonald's stock was higher one month later 67% of the time, averaging a one-month gain of 3%. A move of similar magnitude would have MCD firmly above its year-to-date breakeven level, an area that happens to coincide with the 320-day trendline.
Another factor to watch is the equity's 14-day relative strength index (RSI), which checks in at 30 right now but spent all of last week around 20, firmly "oversold" territory and signaling potential rebound opportunities in the short term.
Options are an attractive choice, per MCD's Schaeffer's Volatility Index (SVI) of 17% that sits in the 7th percentile of its annual range. This suggests options traders now anticipate lower-than-usual volatility expectations.
