As a fast-food icon, McDonald's Corp (NYSE:MCD) is structurally built for resisting recessionary conditions, offering nourishing meals and beverages conveniently and at relatively low prices. But even the Golden Arches couldn't overcome the unique pressures of the current economic paradigm. Nevertheless, market demand for MCD stock remains hot, facilitating a possible contrarian bullish opportunity.
Last Thursday, McDonald's released its first-quarter earnings report, which revealed disappointing sales trends in both U.S. and international markets. Domestically, revenue fell 3.6% for the three months through March 2025, primarily due to weaker traffic from lower and middle-income groups. It should be noted, though, that spending from upper-income households remained strong.
On the international front, operations face headwinds as the management attempts to deliver value offerings and expand market share. Predictably, anti-American sentiment has risen in parts of Northern Europe and Canada. That, combined with the economic uncertainty at home stemming from President Donald Trump's tariff policies, has taken a bite out of McDonald's financial performance.
Still, there are encouraging signs that shouldn't be ignored. Beyond the continued support of higher-income customers, McDonald's is seeing traction with its $5 meal deal, which will be extended through year-end.
On a much bigger level, President Trump — despite tough rhetoric — has previously wavered on sustained, full-throttle tariffs. This dynamic suggests that the White House is at least aware of the political consequences of a persistently downbeat economy. As such, it wouldn't be unreasonable to be contrarian on MCD stock in the hopes of cooler heads prevailing.
Betting On The Statistical Edge Of MCD Stock
Professional blackjack players often deploy a strategy called card counting. Basically, the idea is that in a standard, shuffled deck with no counting or manipulation, the house has a slight edge (typically around half-a-percent). However, under certain circumstances, the deck becomes hot — resulting in a higher proportion of high-value cards. This dynamic shifts the odds in the bettor's favor, incentivizing larger wagers.
Publicly traded securities often follow a similar logic. Under any given circumstances, a stock may have a baseline probability of long-side success. One can squabble over the details but for a typical blue chip, the odds a long position will be profitable in a week's time is about 51% to 52%. It's not nothing, but it's also not anything to get excited about.
That said, there are certain circumstances when the deck gets hot. When it does so, an incentive materializes to take an aggressive wager.
In the past 10 weeks, MCD stock printed a "6-4" sequence: six weeks of upside interspersed with four weeks of downside, with an overall net positive trajectory across the period. From a technical interpretation, MCD has shown a strong uptrend, indicating robust momentum and buying strength.
What makes the demand sequence empirically significant, though, is that in 60.71% of the times the pattern flashes, MCD stock has popped higher in the following week. For context, MCD already favors long-side speculation, with the baseline one-week probability standing at around 56%.
With the deck being hot, traders have an opportunity to go against the implications of McDonald's disappointing first-quarter earnings report. It just might be the smarter move.
An Aggressive Strategy for a Stable Blue Chip
Based on historical trends following the 6-4 sequence, if the positive pathway materializes, MCD stock could hit a peak median price of over $323 over the next three weeks before tapering off. On the other end, should the bears win, MCD risks a gradual deflating until leveling off at around $313.
Considering the higher statistical likelihood of upside, aggressive speculators may consider the 320/322.50 bull call spread expiring May 16. This transaction involves buying the $320 call and simultaneously selling the $322.50 call, for a net debit paid of $116. Should MCD stock rise through the short strike price of $322.50 at expiration, the maximum reward stands at $134, a payout of 115.52%.
What makes this trade so aggressive — and thus so rewarding — is the narrow window of profitability. Currently, the trade's breakeven price is $321.16, about 1.43% above the time-of-writing price. Therefore, MCD stock must hit the mark or exceed for speculators to win.
Of course, the idea here is that empirically, the 6-4 sequence puts the odds in favor of the bettor. It doesn't guarantee anything. However, this trade leverages market intelligence, facilitating more confidence in the decision-making process.
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