McDonald’s shares fall the most in three weeks on Monday, restaurant sales in the US drop for the first time in six quarters

The DJIA-featured McDonald’s Corporation (MCD) reported a decline in sales at its established restaurants in the United States for the first time in the past six quarters, as the chains all-day breakfast innovation faced fierce competition from supermarkets, convenience stores and other food sellers.

McDonald’s shares registered their largest daily retreat since January 3rd on Monday. The stock went down 0.72% ($0.88) to $121.38, after touching a daily low at $119.82, or a level not seen since January 10th ($119.73). In the week ended on January 22nd the shares of the restaurant chain added 0.63% to their market value compared to a week ago, which marked a second consecutive period of advance and also the best performance since the week ended on December 18th. The stock has edged down 0.28% so far during the current month, following a 2.05% surge in December. The latter has been a second straight month of gains. For the entire 2016, McDonald’s shares gained 3.03%.

Sales at restaurants in the US open at least 13 months went down 1.3% during the fourth quarter of 2016 compared to the same period a year earlier. The median forecast by analysts had pointed to a 1.4% slump. Sales abroad came above market expectations as well, supported by demand in the UK, China and Japan.

The companys total revenue was reported to have shrunk 5% to $6.03 billion during the final quarter of 2016, with the main influencing factor being the sale of restaurants to franchisees.

The chains earnings per share, excluding special items, were reported at $1.43 in Q4, which surpassed the market consensus ($1.41), according to Thomson Reuters I/B/E/S.

It has been a practice that lower food costs be passed on to shoppers by supermarkets, while at the same time, menu prices be increased by restaurants in order to mitigate the effect of minimum wages raises.

According to Kevin Ozan, McDonald’s Chief Financial Officer, the restaurant chain is “mindful of the disparity” in pricing.

According to Reuters, traffic at McDonald’s restaurants in the United States has decreased by over 10% during the past 4 years, with the media citing a client note from David Palmer, RBC Capital Markets analyst.

Daily and Weekly Pivot Levels

With the help of the Camarilla calculation method, todays levels of importance for the McDonald’s stock are presented as follows:

R1 – $121.59
R2 – $121.79
R3 (Range Resistance – Sell) – $122.00
R4 (Long Breakout) – $122.62
R5 (Breakout Target 1) – $123.35
R6 (Breakout Target 2) – $123.67

S1 – $121.17
S2 – $120.97
S3 (Range Support – Buy) – $120.76
S4 (Short Breakout) – $120.14
S5 (Breakout Target 1) – $119.41
S6 (Breakout Target 2) – $119.09

By using the traditional method of calculation, the weekly levels of importance for McDonald’s Corporation (MCD) are presented as follows:

Central Pivot Point – $122.00
R1 – $123.27
R2 – $124.29
R3 – $125.57
R4 – $126.86

S1 – $120.97
S2 – $119.69
S3 – $118.67
S4 – $117.66