In uncertain markets, focus on stocks showing relative strength
Headlines about tariffs, weak economic data, and a softer-than-expected jobs report have left traders scrambling to make sense of the chaos.
Major indexes like the S&P 500 and Nasdaq are heading lower again this month, and volatility is running high.
But even in uncertain times, some stocks rise above the noise. McDonald’s (MCD) is doing just that, trading near its 52-week highs and showing exceptional resilience.
This strength, coupled with a powerful technical setup, makes MCD a standout idea worth keeping on your radar.
What Makes MCD Stand Out?
MCD has been a leader this year, outperforming the market with a nearly 10% year-to-date gain while the major indices are in the red.
After its recent earnings beat, the stock has remained strong, setting up a textbook example of relative strength. But what’s even more exciting is the technical picture:
- Daily, Weekly, and 195-Minute Squeezes
- Perfectly Stacked EMAs on Multiple Timeframes
- Clear Outperformance Against Broader Markets
Let’s dive into why these factors matter and how they could signal a major opportunity.
What Is a Squeeze – And Why Does It Matter?
A squeeze is one of the most reliable technical patterns, signaling that a stock is “coiling up” before its next significant move.
It occurs when volatility contracts, causing Bollinger Bands (which measure standard deviation) to move inside Keltner Channels (which measure average true range).
Think of it as a spring being compressed. The longer the spring stays compressed, the more energy it releases when it finally expands.
For MCD, we’re seeing squeezes on three timeframes: daily, weekly, and 195-minute charts.
This multi-timeframe alignment is super powerful, indicating that volatility has tightened across the board. When the squeeze finally “fires,” it often leads to a sharp, sustained move in one direction.
Why Stacked EMAs Are a Bullish Signal
MCD’s technical setup gets even stronger with its stacked Exponential Moving Averages (EMAs).
Stacked EMAs occur when shorter-term averages (like the 8-day EMA) sit above longer-term averages (like the 21-day, 34-day, and 55-day EMAs), creating a smooth, upward ladder.
This “bullish ladder” signals that the stock is in a strong, sustainable uptrend. Each EMA acts as a layer of support during pullbacks, making it easier for the price to stay above key levels.
For MCD, the clean stacking of EMAs across multiple timeframes shows that institutions are likely accumulating shares, further solidifying the stock’s uptrend.
Relative Strength: A Leader in a Weak Market
While the broader market has struggled with volatility and uncertainty, MCD has been a beacon of strength.
Relative strength measures how a stock performs compared to the overall market, and MCD has consistently outperformed.
This year, while major indices have fallen, MCD has climbed nearly 10%. Its ability to hold near 52-week highs during market weakness shows that it’s attracting buyers even in tough conditions. In trading, strong stocks tend to stay strong – and that’s exactly what we’re seeing with MCD.
Your Action Plan
I don’t currently have a position in MCD, but it’s firmly on my watchlist. The combination of a multi-timeframe squeeze, stacked EMAs, and relative strength makes this a high-probability setup for traders.
If the squeezes “fire” to the upside, we could see MCD have a massive breakout.
This kind of technical alignment is exactly the type of setup that can lead to explosive moves.
And while MCD is a strong candidate right now, there’s an even more powerful strategy traders can use to capture massive gains just minutes after the market opens.
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