McDonald's Closed Below 50 Day Moving Average Wednesday as Shares React to Goldman Downgrade

McDonalds

experienced downward pressure Wednesday as analysts from Goldman Sachs removed the large cap fast food company from its "conviction buy" list, saying it sees "little visibility towards meaningful EPS upside in the near-term." The firm also dropped its price target to $110 from $114. Most analysts covering MCD maintain a bullish stance toward the stock. MCD fell sharply Wednesday along with the broader markets, after moving higher during the past 4 trading sessions. MCD has broken through resistance near the 50-day moving average on Tuesday, only to see its stock price reverse in heavy volume, closing below the 50-day moving average. Support Wednesday was now seen near the lows created in mid March in $95. A break of this level would likely test the 200-day moving average near $92. Resistance beyond the 50-day moving average is the recent highs made in January and February at $101 and $100 respectively. In early March, the 20-day moving average crossed below the 50-day moving average, which is generally a sign that a medium term down trend is in place. The MACD (moving average convergence divergence index) did an about face after creating a buy signal where the spread 9the 12-day moving average minus the 26-day moving average) crossed above the 9-day moving average of the spread. The index moved into the red after moving into the black during the past few trading sessions. The RSI (relative strength index) which is a guide to overbought and oversold levels, reverse its upward trajectory, moving down to the 44 level after printing near 60 which is the high end of the neutral range. The Bollinger bands, expanded, as MCD moved lower, which is a sign that negative momentum is building on the stock price.