October 22, 2010

Mc Donald’s Earnings Lifted Its Stocks To An All Time High!

Hello ladies and gents! Here’s my update on the world’s largest hamburger fast food chain. Yesterday, Mc Donald’s Corporation reported a jump in their net income for the 3rd quarter of 2010. Earnings were $1.29 a share, up by 12% year to year. Solid margins and a 4% increase in overall sales maximized the profits (probably because of the happy meals). On the other hand, the US market over all was terrific. The US unemployment claims dropped by 23k to 452k. This data signals a recovering economy. Positive earnings result from Amazon, Caterpillar and American Express played a major role in brining the market higher and propelled most stocks to climb. Also, the Dow Jones Industrial Average was at an all-time high since May of this year.



In my technical analysis, the Mc Donald’s stocks tapped the 7-year ascending channel’s resistance yesterday. The all-time high that I mentioned in my previous Mc Donald’s post during the start of this month (kindly check this) has been breached and a new one at $79.48 was set. If this stock pick successfully breaks above that level, the next resistance it could aim for is $85 or even the $90 psychological resistance. Personally, the 7-year ascending channel looks pretty tough and won’t easily break unless the market swings the opposite direction. If the stocks bounce off the resistance and drop, the significant support could be the 14-month uptrend. If that trend doesn’t hold the stocks from further declining, the next marker could be the 7-year ascending channel’s support. Above all, I’m still bullish on Mc Donald’s as long as the uptrend remains intact.

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