The Weekly Triangle in McDonalds MCD

Bycjrosen

Here’s another classic “Blue Chip” Dow Jones component along with Exxon-Mobil (XOM) that is forming a large-scale symmetrical triangle formation.  Let’s take a look at McDonald’s (MCD) weekly stock chart.

I mentioned the Exxon-Mobil (XOM) triangle in two previous posts (September 21st post and also September 30th).

I wanted to highlight a similar triangle consolidation – with the same implications – in McDonalds.

The upper triangle trendline boundary line rests at $58 per share, while the lower line rests near the $55 level.

The moving averages offer absolutely no help (in terms of support and resistance) but do note the intense price compression (consolidation) in price.  They show that they “Value Area” or average price rests about the $56 level.

Price has now wound down to an equilibrium level as the apex of the large-scale triangle closes in on price.

Like XOM, the expectation is for a price expansion move (impulse) out of the triangle in either direction.

Keep watching price until we get a breakout, and then watch to see if we get an expansion move as expected which would be a trading opportunity for those so inclined.

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter:  http://twitter.com/afraidtotrade

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3 Comments

  2. Do you see more such triangles in this market than usual, and if so, is there a conclusion that can be generalized for the market at this time?

    Also, I read on Stockcharts.com that after a breakdown or up from the apex of the triangle, the price moves back to the midpoint and then continues in the direction of the breakout. Do you agree? Thanks.

  3. Do you see more such triangles in this market than usual, and if so, is there a conclusion that can be generalized for the market at this time?

    Also, I read on Stockcharts.com that after a breakdown or up from the apex of the triangle, the price moves back to the midpoint and then continues in the direction of the breakout. Do you agree? Thanks.

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