McDonald’s could slide up to $237 as key resistance holds back the price

For about a month, McDonald’s Corporation (NYSE:MCD) has been moving within narrow ranges. The consolidation happens after facing the resistance of around $255. However, the stock has still maintained strengths and avoided quick drops from the consolidation. 

McDonald’s was boosted by a robust quarter result at the end of April. The company reported a revenue of $5.67 billion in the quarter, up from $5.12 billion in the prior year. The revenue also surpassed estimates of $5.57 billion.

In the company’s outlook, CFO Kevin Ozan said McDonald’s maintained a low to mid-40% operating margin. Ozan believes McDonald’s is well-positioned to counter unprecedented macro pressures. The quarter results emphasised a long-term hold on the stock as it still has room to go higher. But investors and new buyers could need to be a little patient as the stock faces an imminent drop.

McDonald’s faces a correction after hitting resistance at the $255 area

Source – TradingView

Technically, McDonald’s pressure heightened after failing to break successfully past the $255 zone. The stock is currently going lower and could test the minor support of $244 again. The stock could jump from $244, but the established support is at $237. If the current bearish pressure persists, the stock could drop to $237. However, investors need to watch $244 for a potential bullish reversal.

Concluding thoughts

Investors should look to buy McDonald’s based on strong quarterly results and outlook. Although cost pressures continue to be a headwind, McDonald’s provides a robust defensive alternative. Investors should look to buy lower after the current bearish weakness abates. The support levels are $244 and $237.

The post McDonald’s could slide up to $237 as key resistance holds back the price appeared first on Invezz.

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