Elliott Wave Perspective

According to the Elliott Wave theory, McDonald’s stock might rise before taking a slight dip as its price structure continues to develop. The patterns in the stock’s price suggest it could be forming either a triangle or a bullish nest. If a correction happens, the stock could drop to around $336.36, suggesting the end of wave ((1)) and signaling a possible correction. These insights come from the Elliott Wave Forecast team’s analysis. Currently, McDonald’s stock appears stable, fluctuating within a set range, likely shaping a technical triangle pattern. This indicates a period of consolidation before a possible upward move towards $336. The key support level to watch is at $283.63, which is expected to hold in the near term. Our analysis is backed by McDonald’s third-quarter report from October 2025, which showed impressive global sales growth of 8.8%. U.S. sales were particularly strong, increasing by 8.1% due to strategic price hikes and steady customer traffic. These results affirm that McDonald’s business model is effectively managing inflation pressures.

Consumer Spending Resilience

Additionally, consumer spending data from November 2025 showed resilience, with retail sales stable despite ongoing inflation. This economic environment benefits value-focused companies like McDonald’s, solidifying its reputation as a defensive stock. This trend was evident during the inflationary periods of 2022 and 2023 when McDonald’s outperformed the broader market. In the upcoming weeks, consider a strategy of selling out-of-the-money put spreads. This approach takes advantage of the anticipated price stability and the strong support near $283, allowing traders to earn premium while the stock consolidates. The moderate volatility keeps option prices reasonable, making this a practical income-generating strategy. As we near the target of $336.36, traders should brace for a potential reversal, as a significant correction is expected after reaching this peak. To prepare, starting long put positions or setting up bear call spreads can help hedge against the anticipated correction while capturing initial gains. Create your live VT Markets account and start trading now.

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