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Flipping Burgers for Flipping Huge Profits

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This week we’re setting up a new trade from an old childhood favorite company that is moving beyond basic burgers to become a newer destination for foodies with cash to spend.

McDonald’s

McDonald’s Corporation (MCD) is a company of childhood lore and dreams. Nearly every child loves the company – but not the clown that is plain scarry. And parents indulge their brood with near abandon – aiding their sales – even in the darker times for the company.

And even as adults – every one of us will indulge if only once a year. Ray Kroc’s favorite, the regular hamburger is a favorite of many. And the Filet-O-Fish, even if fish is a relative word in the product has its own compelling proposition.

Then there’s the coffee. Not bad to pretty good. A staple from a time when coffee was the leading drink of Americans decades ago. Not too hot though, as the company had that legal mess of comic lore long ago.

But McDonalds isn’t about that simple hamburger. It’s now about a menu that can’t be fully displayed. And it can’t hire enough folks to fulfill orders as kids don’t work anymore to their own loss of experience that they will regret later in life.

The company keeps trying to control costs, bolster sales and keep franchise folks in the fold. And for the last quarter it came through with a revenue gain of 56.53%. And that revenue came with an operating margin of 38.10% from somewhere or somehow.

We see the stock has life to it, so it is a buy for us right now for this week.

McDonald’s Price Source Bloomberg

Targeted Price Action

There are two ways to profit from McDonald’s for this week.

The first is to buy the stock that at the current level of 237.29 is set for our target price for McDonald’s at 242.95. That equates to a gain potential of 2.39%.

The second is to play our option alternative for McDonald’s for a bit of internal leverage on the stock. Our call option to buy is for the September 240.00 strike (MCD US 09/17/21 C240). The current ask is at 2.87 and pay no more than 2.94 for a contract cost of $294.00.

The short-term trading for McDonald’s shows that the current share price is just above the 50% retracement Fibonacci level at 236.73

McDonald’s Short-Term Fibonacci Price Source Bloomberg

You’ll note that the next retracement level up at 61.80% is at a price level of 242.18. Our analysis shows a bit more targeted upside to our 242.95.

Have a smile today and this week with McDonald’s.

Keep on Trading,

Josh Martinez

Editor, Top 5 Weekly

P.S. This is a great pick, but it’s still only one out of my Top 5. To find out about the rest of the trades I’m recommending, complete with specific entry and exit points, you need to click here and join me on the Top 5 journey…