The MarketSmith Blue Dot Scan finds stocks when two criteria are met: stocks hitting a 52-week high in their Relative Strength line are flagged. A visual cue is then added as a translucent blue dot appear on the Relative Strength line of the stock’s chart. In addition, the stock is added if it is currently building a base.
If both of these conditions are satisfied, the stock remains on the list for 90 days. You can access the list by clicking on the “Open Stock Ideas” button in the top-right corner on any MarketSmith chart.
McDonalds Blue Dot
McDonalds Corp. (MCD) is trading 27.75 x free cash flow and a premium to adjusted operated earnings. That said, the company has several reasons to be bullish in this environment.
- McDonald’s bullish potential is based on the company’s outperformance versus the competition during Covid lockdowns
- McDonald’s superior operation helped the company recover with improved internet enabled delivery capabilities.
- Despite underperforming the market, Seeking Alpha has a $310+/share price target – a 26%+ upside.
MarketSmith picked up “blue dot” status as McDonalds stock was flagged when its RS line rose to a new high.
We’re watching for a confirmation breakout.
Volume is increasing suggesting institutions are accumulaitng shares of the fast food chain.
Click to enlarge chart.