McDonald's is lagging the market, but technical analyst Todd Gordon sees a big breakout from its funk.
div > div.group > p:first-child"> The world's largest burger chain has added 5 percent since January, its smallest quarterly gain in three quarters, and less than half the advance of the broader market."McDonald's possibly breaking out here. I'm liking, or I'm loving, the trade — to steal from the commercial," Todd Gordon, founder of TradingAnalysis.com, said Tuesday on CNBC's"Trading Nation.
Since the stock's consolidation in the final months of 2018, Gordon predicts a renewed surge to break past the $190 level. The stock last hit a record high of $190.88 in late November. "We're seeing higher lows, indicating buyers are becoming more aggressive as we move on up. I do think we should get the breakout, eventually targeting the $200 region," said Gordon.To take advantage of that move, Gordon is buying the May 3 expiration 190/200 call spread for roughly $2.78. This trade pays off when McDonald's ends the contract above $200. Gordon is betting the stock could run the last leg of that move higher when it reports earnings on April 30.
"I remain net long in my portfolio. I hold McDonald's in my longer-term equity portfolio, so I like the way the stock acts," Gordon said.
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