Chart of the Day – MCD on Talking Numbers

by Enis August 8, 2012 3:24 pm • Commentary

Here’s a preview of what I’ll be discussing on Talking Numbers today between 3:25 and 3:35 pm EST on CNBC:


MCD reported weak monthly same store sales data this morning.  In fact, as Dan mentioned in QuickHits earlier, Bloomberg reported that it was the first month since 2004 that Mcdonalds saw sales fall month over month in every major region (N. America, Europe, and Asia).  The stock has actually held up well today given the bad news (it traded as low as 86 pre-market), but the uptrend of the past 3 years has clearly been broken:



The stock’s 3% dividend yield certainly gives it some downside support from investors searching for yield, but for the stock to maintain it’s high teens P/E,  growth will need to reverse its current downward momentum for the stock to stabilize.  Here is a 2 year chart that shows $80 as prior resistance that could now act as support, and I think $90 should now act as relatively stiff resistance:



McDonald’s has been a leader on the upside in this market ever since the fall of 2009.  It has convincingly lost that leadership perch for the time being.