Mastering McDonalds stock analysis: key indicators, chart techniques, and expert trading tips

5 min readDec 4, 2024

McDonald’s Corporation (MCD) is a globally recognized brand and a staple in the fast-food industry. As one of the most influential stocks on the NYSE, MCD attracts both beginner and experienced traders alike. But how do you analyze McDonald’s stock effectively to make informed trading decisions? In this article, we’ll dive into the essential indicators, chart techniques, and expert trading strategies that can help you understand MCD’s price movements. From identifying trends to spotting potential reversals, we’ll guide you through a structured approach to analyzing MCD stock. Plus, we’ll explore some of the top brokers that provide access to MCD and other major stocks, so you can confidently start trading.

A detailed McDonalds (MCD) stock chart analysis

The real McDonald’s Corporation (MCD) stock chart is taken from the Investing.com website. This analysis serves as a guide for beginners on how to analyze stock charts and is not a trading recommendation.

This is a daily chart for McDonald’s Corporation, which means each candlestick represents a single trading day. This timeframe is useful for analyzing short-to-medium-term trends and gives insight into daily price movements.

Indicators in detail

1. Exponential Moving Average (EMA) — Blue Line

The EMA is a type of moving average that gives more weight to recent prices, making it responsive to price changes. In this case, the 20-day EMA (20-period average) is used.
Purpose: The EMA helps identify the current trend direction. When the stock price is consistently above the EMA line, it generally indicates an uptrend, and when it’s below, it can signal a downtrend.
Current reading: On the chart, the blue EMA line is almost touching the price line, suggesting that MCD may be losing its upward momentum. If the price starts consistently falling below the EMA, it may confirm a short-term bearish trend.

→Learn more about how to use Moving Averages in CFD trading.

2. Bollinger Bands (BB) — Blue Bands with Red Midline

Bollinger Bands consist of:
1. A middle line, which is a simple moving average (usually 20 days) — shown here as the red line.
2. An upper and lower band set at two standard deviations from the middle line (shown as blue shaded bands).
Purpose: Bollinger Bands help measure volatility. When the bands are narrow, it indicates low volatility, while wide bands indicate high volatility.
Current reading: Recently, MCD’s price has touched the lower Bollinger Band. This is significant because:
1. Prices near the lower band may be oversold, which could suggest a potential for a bounce.
2. However, if prices stay near the lower band without bouncing, it could signal strong bearish sentiment.
Volatility analysis: The bands are widening, showing that volatility is increasing, which can often lead to larger price swings.

3. Volume (20-Day Average) — Red and Green Bars

Volume indicates the number of shares traded during each day. Analyzing volume can help confirm the strength of a price move.
Purpose: Strong price movements backed by high volume are usually more significant than moves on low volume. For instance, a strong down day with high volume could suggest panic selling, while a strong up day with high volume might indicate genuine buying interest.
Current reading: In recent days, red volume bars (selling volume) are higher than green bars (buying volume), suggesting that sellers currently have more control.

4. Relative Strength Index (RSI) — Purple Line

The RSI is an oscillator that ranges from 0 to 100, used to assess momentum.
Purpose: RSI values:
1. Above 70 suggest the stock may be overbought (potential for a pullback).
2. Below 30 suggest the stock may be oversold (potential for a bounce).
Current reading: The RSI is around 41, which is below the midpoint of 50 but still above the oversold threshold of 30. This indicates weakened buying pressure, but not to the extent that it’s considered oversold. It implies that momentum is slightly bearish.

5. Moving Average Convergence Divergence (MACD) — Blue and Red Lines with histogram

The MACD shows the relationship between two EMAs (usually the 12-day and 26-day EMA).
Purpose: The MACD line crossing above or below the signal line (usually a 9-day EMA) helps identify trend changes and momentum shifts.
Current reading:
1. The MACD line (blue) is below the signal line (red) and in negative territory, which suggests that MCD is experiencing bearish momentum.
2. The red histogram bars below the baseline show the strength of this bearish momentum, with longer bars indicating stronger downward pressure.

Analysis summary: trend, momentum, and volatility

Trend: The price near the EMA and the MACD below the signal line both suggest a potential weakening of the uptrend or a shift toward a downtrend.
Momentum: With the RSI under 50 and MACD in negative territory, momentum is tilted toward the downside, signaling that bearish sentiment is stronger.
Volatility: The widening Bollinger Bands indicate that volatility is increasing, which often precedes stronger price movements in either direction.

Price prediction and trading plan of MCD stock

Based on this analysis:

1. Short-term prediction:

Given the increased selling volume and bearish indicators (MACD and RSI), MCD may continue to face selling pressure in the near term. However, since the price is near the lower Bollinger Band, there could be a short-term bounce if buyers step in around this level.

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