Stock of the Day: McDonald’s

But that formation has now failed. Price escaped from the channel to the downside, which is often an early warning sign of weakening momentum. The bearish outlook was further confirmed when McDonald’s broke through the pink horizontal support, a key level tested at the end of August. Breaking below both the dynamic channel and the horizontal floor creates a double layer of weakness.

With this move, the market structure officially shifted. McDonald’s is now making lower lows and lower highs, signaling a trend reversal to the downside. Unless the price can quickly reclaim the broken support and re-enter the channel, sentiment remains negative, and sellers are in control.