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Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: Johnny Canuck who wrote (42836)	11/30/2005 9:43:57 AM
From: Johnny Canuck	Read Replies (1) \| Respond to of 70770

MCD May Explode, Here's The Setup Tuesday November 29, 10:33 am ET By TradingMarkets Research Andy Swan created and co-founded DaytradeTeam.com five years ago on a principle of empowering individual stock and options traders with the techniques and analysis methods typically reserved for elite professionals. His expertise in technical analysis and commitment to educating members earned DaytradeTeam a top-ranking among advisory services for several years. Go to www.TradingMarkets.com to start your free trial to Andy's live trading room, Daytrade Team Service. McDonalds (NYSE:MCD - News) is setting up for an explosive breakout to the upside, and I want to make sure you get in on it when it happens. I know what you're thinking. McDonald's? The burger joint? Come on Andy--give me something with bytes or bits or clicks like (NasdaqNM:AAPL - News) or (NasdaqNM:GOOG - News). Well, the beauty of technical analysis is that you don't have to care anything about what the company actually does. The only thing that matters is what the stock does, and I like what I see on MCD. The first thing you'll notice on the chart above is the 3 month consolidation pattern that MCD has made between 32 and 34. Typically these types of tight trading ranges are the base for a large, extended move in one direction or another. Just look for a break of the consolidation range on above average volume and play the stock in that direction with a 4% trailing stop. Look for a break (and hold) above 34.25 on volume of more than 9 million shares as your indicator to initiate a bullish position. The key here is patience. Getting in now at 33.95 or 34 may be tempting because you will already have an extra .25 profit by the time the stock begins its breakout move. Unfortunately, this type of thinking gets a lot of traders in trouble because they are ignoring the power of the 34.00 resistance level that has made this consolidation pattern so appealing in the first place. By simply waiting for a move above 34.25 on good volume, you put the risk/reward ratio in your favor by a huge margin---where if you get in now you actually have a greater chance of the 34.00 resistance level holding and losing on the trade than winning. If the stock never breaks 34.25 on big volume, we'll just keep on looking for other opportunities in a very tradable market! Andy Swan