McDonald's Just Hit a New 52-Week Low. Don't Buy the Dip Until After August 4.
McDonald's Just Hit a New 52-Week Low. Don't Buy the Dip Until After August 4..
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Tech stocks drove the S&P 500's nice bounceback yesterday, bringing the index's three-day losing streak to an end. The 0.89% gain, however, wasn't enough to produce a positive result over the past five trading days, down 0.44%.
As a result of the downward trend over the past five days, the new 52-week lows on the NYSE and the Nasdaq yesterday outnumbered the new 52-week highs, 191 to 134, a telltale sign that investors are worried about an escalation in the Middle East.
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I'm neither a geopolitical wonk nor a technical analyst. What I do know is that for most of the past three months—a period when the index gained over 6%—the new 52-week highs consistently outnumbered the new 52-week lows, often by a wide margin.
I'm not a momentum investor, so on Wednesdays, when I write about stocks hitting new 52-week highs and lows, if the lows led the way the previous day, I'm almost always going to select a name or two from the new 52-week lows.
In yesterday's action, McDonald's (MCD) hit a new 52-week low of $263.65, its 19th of the past 12 months, and down 23% from its March 2 all-time high of $341.75.
Yesterday was the stock's lowest point since July 2024. Before that, it was October 2023, and October 2022 before that.
While I'm not a technical analyst, I do like to look at charts to get an idea of the probability that the stock could trade lower in the future. As you can see from the chart below, the closest the 30-day MA (moving average) has come to heading below the 200-day MA was in June 2004, when the spread was $3.44; today, it is $119.72. The gap has never been higher.
Further, in these 22 years, the shares have dipped below the 30-day on just three occasions: March to June 2020, April to August 2024, and April to July 2026.
We are in the middle of the latest instance. The previous two lasted an average of 4.5 months. We are getting close to the 4.5-month average. If the 30-day MA is going to rebound and move higher, it likely should happen by the end of the summer.
Where that is, I couldn't say. However, McDonald's reports its Q2 2026 results on Aug. 4. A good report would certainly help.
McDonald's global same-store sales grew 3.8% in Q1 2026, with all three of its markets up more than 3%. The company has said it expects its Q2 2026 global same-store sales growth to be lower than the 3.8% gain in Q2 2025.
"'Data suggest McDonald's was unable to power through industry challenges in 2Q, and we are modeling US same-store sales down 2%/reaching a multi-year low in relative performance vs the fast food benchmark,' Citi analyst Jon Tower said in a new note," Yahoo Finance Executive Editor Brian Sozzi wrote on July 16.
However, the Citi analyst sees some light at the end of the tunnel.
"'With beverages on the horizon, we think this can be the low-water mark for both same-store sales and the multiple before a September investor event gives McDonald's the opportunity to make the case for asset investments/a faster pace of menu innovation/beverages as multi-year sales drivers,' he added," Sozzi wrote.
