Bullish Flag in Play

As you can see from the daily chart of McDonald’s (ticker: MCD), the stock is trading between two descending lines on lower volume, forming what many chart pattern enthusiasts refer to as a bullish flag (extended from US$292.21 and US$285.26). You will also note that price action is nearing the upper boundary of the flag after price moderately closed above the Ichimoku’s Conversion Line yesterday (blue at US$287.96).

If further buying materialises and the stock pencils in a daily close above the bullish flag pattern, this could prompt breakout buying in the direction of resistance at US$297.97.

On the other hand, should the bullish flag pattern fail, support is at US$277.88, located near the Ichimoku’s Base Line (red at US$276.26) and the Ichimoku Cloud (the Leading Span B at US$267.87 and the Leading Span A at US$282.11).

Price Direction

With the immediate trend favouring buyers and price action closing in on the upper boundary of a bullish flag pattern, a breakout higher could be seen, targeting resistance at US$297.97.

DISCLAIMER:

The information contained in this material is intended for general advice only. It does not take into account your investment objectives, financial situation or particular needs. FP Markets has made every effort to ensure the accuracy of the information as at the date of publication. FP Markets does not give any warranty or representation as to the material. Examples included in this material are for illustrative purposes only. To the extent permitted by law, FP Markets and its employees shall not be liable for any loss or damage arising in any way (including by way of negligence) from or in connection with any information provided in or omitted from this material. Features of the FP Markets products including applicable fees and charges are outlined in the Product Disclosure Statements available from FP Markets website, www.fpmarkets.com and should be considered before deciding to deal in those products. Derivatives can be risky; losses can exceed your initial payment. FP Markets recommends that you seek independent advice. First Prudential Markets Pty Ltd trading as FP Markets ABN 16 112 600 281, Australian Financial Services License Number 286354.