Investors who want to own a fast food stock need to have "the stomach" to continue tolerating major volatility going forward, MKM Partners chief market technician JC O'Hara said on CNBC's "Trading Nation."
'Positive Read-Through' From Wendy's
One of the more notable fast food restaurant stocks to go through a period of volatility is Wendys Co WEN, and it could serve as a "good example" of what Mcdonald's Corp MCD investors might expect to see, O'Hara said. Wendy's stock fell more than 70% from its February peak to its March lows.
Once the news cycle shifted to become more positive, Wendy's stock underwent a "meaningful" recovery and gained 130% from its lows, he said.
If Wendy's stock can hold on to recent momentum, it could be seen as a "positive read-through for McDonald's," O'Hara said.
A 'Good Sign' For McDonald's
McDonald's sales announcement that same-store sales fell 22% in March due to the coronavirus didn't hurt the stock, Tocqueville Asset Management portfolio manager John Petrides also said on "Trading Nation."
This could be seen as a "good sign" for the near-term, but investors should expect similar concerning announcements to follow, he said.
"With earning season ramping up next week, I do think this is what we're going to see from a lot of companies, and that is, you know, massive downward revision, downward numbers on top-line growth, and companies husbanding cash," Petrides said.
Wendy's shares were up 6.43% at $17.07 at the time of publication, while McDonald's shares were 3.39% higher at $183.50.
Related Links:
McDonald's Withdraws Guidance After Significant Sales Decline In March
Starbucks Shares Fall As Q2 Earnings Halve Amid Pandemic
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