MCD Trade on Jul 28, 2020 09:39 from Cklamb: Tradervue User Stock Trades.

MCD
Intraday Fundamentals
• At the end of last month, McDonald's said, nearly all of its restaurants worldwide were open, with around 2,000 domestic locations operating with limited capacity.
• McDonald's was off 2.2% to $196.75 in early trading following the results. While the fast-food chain missed expectations for its bottom-line earnings, investors in other stocks have been willing to look past disappointing figures, given the pandemic, if management can provide other upbeat commentary.
• Yet there were more things to worry about in the report.
• The company said it spent $200 million to help franchisees attempt to juice sales via advertisements, while it spent almost $76 million on supply-chain expenses and paying off unpaid bills from franchisees. Restaurant margins were down 25%, hurt by free meals for first responders and personal protective equipment expenses for employees.
• McDonald's and other companies have to spend money to keep workers and customers safe, so that's an expected expense. Yet consumer behavior has also changed.
• While the average check total rose in the quarter, guest counts fell, and breakfast was once again one of the toughest parts of the day. This speaks to the behavior we've seen elsewhere: People are limiting their risk by making fewer trips out, whether to shop or eat, and though they spend more on the occasions when they do leave the house, it's not enough to compensate for the loss of more frequent outings.
• Moreover, high unemployment and remote working have disrupted commuters' routine of stopping for breakfast on their way to the office, and fewer seem willing to make the trip to the chain without that impetus.
• McDonald's is hardly the only restaurant that is dealing with pandemic- related headwinds that are delaying their recovery, and as people are increasingly hunkering down for the long term in the U.S., they are more willing to cook for themselves, to save money and benefit their health.
Technicals
Daily Chart
Hourly Chart
Intra Chart
Trading Strategy
• I did not prep for this prior to trading it. I was aware of the earnings miss. I just did not prep for it. I caught this because of someone noting that it was about to give up the lower end of the opening range.
Reading the Tape
I did not get a read on the initial entry. I would however start adding at every stall very small until the tape got stuck just above 198.50 allowing me to take a couple larger adds.
Trade Management

Trade Notes
• The only reason that I was able to make this work is staying small on the break and then adding very small to keep my emotions a little more in line. I started knowing that I was probably shorting on the extension and had the though of adding to the position above 198. If this would have been prepped for and not a reaction for this time a day, I may have been in this earlier and out on this bounce. I would say that I did manage this to a thesis that I felt good about. But, if this would have worked against me much longer, I am not sure that I could have stuck with this.