With red Monkey coming in and putting the markets into red yesterday, most indices have dropped 2-6% in one night. We can expect Hong Kong and Singapore Market to follow suit at around this range when they open up tomorrow.
How about our NYSE:MCD that I have been so confident about?
Bad news: It has breached our trend low (or also known as our trend support)
Good news: It rose 2 points yesterday
Unfortunately in my view based on my trading rules, McDonald’s Corporation stock has met its reversal in the weekly chart. Reasons being number 1, it has broken the up-trend line support in last week’s blow which itself tells you the uptrend has weakened. Number 2, last week’s bar closed as a bearish engulfing pattern which means that there are many more sellers compared to buyers. Number 3, it opened below $113 which is our past 10 weeks low, showing lack of demand despite being at the low.
If I was a very conservative trader, I should really take this 2% loss (this is where risk management comes into play and keep you emotionless about your trades) about now when market opens. But as you know I am not (haha) , I will do my usual stunt of looking at setting a sell limit order at the best price I think I can get. 😛
Looking at McDonald’s Weekly Chart, I am guessing it will probably retrace as high as $118.4 as that level coincidentally meets the 50% Fibonacci Retracement level and a monthly pivot level.
Will update more soon when I’m back Singapore! Meanwhile, Happy Lunar New Year & may you enjoy wealth and health in 2016! Gong Xi Fa Cai 🙂