Hi Shoppers,

On Sunday I wrote about McDonald’s (Ticker: MCD) possibly having a doji in Friday’s candle. 

It didn’t pan out because it did not trade lower on Monday. So, no confirmation, no trade.

But check out the chart now:

MCD has rallied over 14% off that doji on June 17 and yesterday’s candle looks like it could be a signal of a change in trend.

The large red candle completely engulfs the previous green candle at the top of an uptrend.

This is a bearish engulfing candle and could be signaling the end of this uptrend.

If MCD opens and trades lower, I think it can pull back to $256.70 and possibly $253.

Looking at the options, I like the Aug. 12 puts:

I like buying the 257.50 puts with an implied volatility of 18.81 and selling the 247.50 puts trading an implied vol of 24.24 and paying around $1.50.

That gives me a ten point spread with edge already built in by buying a lower vol than I am selling.

Trade Review

Quantumscape (Ticker: QS) broke out yesterday and I hopped in buying the Aug. 19 11.50 calls.

Carnival (Ticker: CCL) also had a nice bullish day and looks to trade higher.

Thanks for Reading … See You Next Tuesday.

Licia Leslie