MCDONALDS STOCK RAPIDLY APPROACHING KEY SUPPORT

McDonald's shareholders have had to endure their ownership in the stock over the last seventeen months. How much longer will the stock price be a burden on the longs' portfolios statements? McDonald's Corp

has been in a free fall since the May peak just north of $102 per share. As the stock approaches key support at $91.49, will the company get it together early enough for those buying down here to be rewarded in the near future? What the bulls are seeing… The bullish camp in McDonald's stock loves the opportunity to buy MCD shares at a key support level and while the key oscillators are reading deeply oversold for MCD. Right now, support (according to technicians) comes in at $91.49 (with the stock at $92.50), the RSI comes in at around 30 (oversold for this stock) and the Williams %R reading comes in at 9.46 (just about to oversold reading). So, maybe another day or two of weakness and the bulls will get their ideal entry point. Fundamentally, the company is seemingly always sporting attractive profit margins (over 20%) and huge positive cash flows. What the bears are seeing… The bears jump right in an point out that McDonald's is carrying an unusually high level of debt (debt-to-equity ratio of 95.52) and is a bit pricey when you look at their price-to-book of 5.66 and/or their price-to-earnings of just under 16 – which is only expensive when compared to flat revenue growth estimates and earnings growth estimates of around 8 percent. Technically, the bears point out that a downtrend is a downtrend until it is broken – and MCD's downtrend is very much still in place. The technical take… Technicians note that McDonald's stock is very close to projected support at $91.49 (based on some symmetry in the recent and current moves in the stock). In addition to the projection techniques used by technicians, the $91.49 level is also a horizontal line of support. With oversold readings present and/or approaching rapidly, technicians note that MCD shares may be a good play for value players.