McDonald's Swings Wildly After Technical Glitch Causes Chaos: Here's What To Watch Going Forward

McDonald's Corporation MCD saw massive volatility when the market opened on Tuesday after a technical glitch at the New York Stock Exchange caused McDonald's and many other stocks to be halted to the downside.

The fast-food giant gapped down 12.21% to start the trading session before quickly trading up near to flat. On the daily chart, a massive upper wick appeared, showing McDonald's hit a new all-time high of $302, but because the spike didn’t show on smaller time frames it was unclear if any shares exchanged hands at that level or if the wick was due to the glitch.

Due to the glitch, technical traders are best to disregard Tuesday’s candle and assume McDonald’s would be trading in a tight range on Tuesday if the malfunction hadn’t occurred.

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The McDonald's Chart: Regardless of McDonald's candlestick on Tuesday, the stock negated its uptrend on Monday by printing a lower high of $271.17. On Friday, the stock printed a higher low of $262.83 and may now tighten into a triangle pattern.

If McDonald's forms a triangle pattern by making a series of lower highs and higher lows over the next few trading days, traders can watch for the stock to eventually break up or down from the formation to gauge future long-term direction.
Despite the high volatility on Tuesday, McDonald's was trading on lower-than-average volume, which indicated consolidation. As of midafternoon, only about 1.54 million shares had exchanged hands compared to the 10-day average of 2.56 million.
If a triangle pattern forms and McDonald's eventually breaks from it, the stock should do so on higher-than-average volume.
McDonald's has resistance above at $270.73 and $275.94 and support below at $265.95 and $258.43.

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