McDonald’s Corp. (NYSE: MCD) shares fell on Thursday Dec 1 with lower trade volume than normal after a number of analysts weighed in on the investing value of the stock with a downgraded rating.
Meanwhile, U.S. stocks opened with slight gains on Thursday.
The Dow Jones Industrial Average DJIA, +0.31% rose 38.22 points, or 0.2%, to 19,174, while the S&P 500 SPX, +0.01% added 2.1 points to 2,202, a rise of 0.1%.
The Nasdaq Composite Index COMP, -0.32% rose less than 1 point to 5,323, essentially unchanged on the day.
Shares of McDonald’s Corp. (NYSE: MCD) were downgraded by analysts at Guggenheim in a note to their investors today. Guggenheim currently has a rating of Neutral on the shares. As a means of comparison, a number of other analysts have spoken on the stock recently, and McDonald’s Corp. has secured a consensus one-year price target of $127.20, higher than the opening price of $118.96, a difference of 10.76 percent. McDonald’s Corp. stock has a 52-week high of $131.96. Downgrades occur when analysts consider that the future prospects for the security have diminished from the initial recommendation, usually because of a considerable and major change in the company’s operations, future direction or industry.
Shares of McDonald’s Corp. (NYSE: MCD) opened at $118.96 on Tuesday trading between $117.87 and $118.96, and last traded at $118.23, a drop of $1.04 per share or -0.87% compared to the previous closing price.
McDonald’s Corp. (NYSE: MCD) now has a market cap of 98.18B.
McDonald’s Corp. (NYSE: MCD) Average Daily Trading Volume
The stock’s average daily volume is 4,444,940 shares out of a total float 830,061,000 and some 519,744 shares crossed the trading desk yesterday, lower than the norm. Momentum traders often use swings in trading volume to determine substantial volume accumulation or dissemination by institutional investors, so trading volume is likely to increase in the next few days.
As with all possible breakouts, investors watch for volume to be at least 40%-50% above normal on the breakout to indicate that fund managers and other professional investors are jumping in.
Institutional sponsorship is defined by ownership of a stock by mutual funds, banks, pension funds and other large institutions.
Professional investors such as these have teams of analysts researching thousands of stocks, so it is good confirmation to see them taking a postion in a stock you are considering.
McDonald’s Corp. (NYSE: MCD) Moving Averages
A moving average can also act as support or resistance. In an uptrend a 50-day, 100-day or 200-day moving average may act as a support level, as shown in the figure below.
This is because the average acts like a floor (support), so the price bounces up off of it.
In a downtrend a moving average may act as resistance; like a ceiling, the price hits it and then starts to drop again.
By identifying trends, moving averages allow investors to make those trends work in their favor and increase the number of successful trades.
With that in mind, McDonald’s Corp. (NYSE: MCD) now has a 50-day MA of $114.91 and 200-day MA of $118.44. It has traded in a 52-week range between $110.33 – 131.96 and today’s last price is 10.40%% lower than the 52 week high of $131.96.
Earnings growth is a critical factor to consider when buying stocks and investors look for companies that have grown their earnings by at least 25% for a 3 year period.
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