This week, Archna (our advanced options contributor), is chasing McDonald’s post earnings Feb 17th. MCD is a global restaurant chain in the consumer cyclical sector, with price consolidating just below all-time-highs.

Samantha is bullish:

Trend Timeframe:

McDonalds is not a momentum play for me. This is a boring but profitable trend-long play that gets defended when market corrects; acts as rotation into value play when growth trips up; and is not just a play on the consumer but a solid REIT proxy. MCD could split into two companies given all the real estate it owns worldwide!

Research suggests (per Yahoo Finance), that MCD owns about 45% of the land and 70% of the buildings at their 36,000+ locations which means McDonald’s is really in the business of serving as landlord for its franchisees.

On the consumer side, business is fine but not robust, as McDonald's CEO offered up post earnings last week (Feb 17th): "With expectations of moderating sales growth and ongoing inflationary headwinds, we expect our company-operated margin will remain pressured in the near-term."

That doesn't scare me away, because I can see that over time, MCDs outperforms SPY. In fact, Total Returns since inception of the S&P 500 ETF in January 1993...
S&P 500 ETF: +1,910% (+10.2% annualized)
McDonald's: +9,220% (+15.8% annualized)

Option Tactic for multi-month trend long play:

MCD looks ready to push above $296 soon on way to $300, but I'm more interested in the top of the trendline near $330/340. With that, there is a boring but profitable financed call spread in Jan 2025 that pays for itself:
Selling the $280P + Buying the $300x325CS for near scratch allows this play time to work itself higher and take advantage of theta decay while it does. If volatility in market picks up, I would add some protection: $268 monthly support (red box). Once above $300 (green box), MCD is in blue sky territory and will likely grind higher in time to at least my price targets (yellow box) - especially if that bullish morning star candle pattern on this monthly chart follows through.

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Archna is bullish:

Chase Timeframe:

MCD long with a stop at 291.3. Looking to do a call diagonal. Selling March 15th 305C to buy March 28th 300C for a total debit of 1.75.
The volatility of March 15th is 18+ and the IV for March 28th is 17.73. So, I can have a theta positive trade which is also directionally bullish.

Rithika is bullish:

Swing Timeframe:

MCD above 295 on MCD can test 300, 305. The top of the channel can go up to 325,330 on an extended push higher wave 5. Has to stay above 295 or can still be in a wave 4 sideways chop.

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Tiffany is bullish:

Swing Timeframe:

As long as it holds above 292.5 it can push straight to the 300 call magnet by end of this week with potential to turn into a multi-week swing into 310+. The 297.5/300 weekly call spread could work or buy next month’s 295c.

MCD Trade Review

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Samantha is bullish:

Swing Timeframe:

MDB is channel chopping 394 to 444, so this makes it only speculative play at best for me, even if others really like it!

I like Mongo as SWING LONG to 527 next few months. Sadly, the options are unattractive risk reward, so I would not play this pick under most circumstances, because options are not liquid enough for me.

IF I were to play MDB via options, I would add a small directional lotto option bet - since IV is expensive and options market is thin - in the APR strikes: like 430C or 470C.

But ideally I would want a financed call spread with a high conviction play:
selling the JULY 350P to finance a 430x530CS for practically scratch.

Problem is with MDB having such a thin options market, that advanced options tactic would be very hard to protect/navigate around. I have no desire to make a market.

So either SMALL SIZE or not at all despite nice looking consolidation and holding 429 monthly support. Good luck!

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Archna is bullish:

Chase Timeframe:

MDB broke higher last week. With SNOW and other software names rallying, MDB is prime to continue the breakout. With little less liquid options, I am choosing the Feb 16th monthly options expiration week to do a call debit spread. 450/460 for Feb 16th for 2.82

Rithika is bullish:

Swing Timeframe:

MDB has a potential Wave 5 upward impulse once it can get over 438. It can then test 450, 475, 500, 515 but it must stay above 415.

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Tiffany is bullish:

Swing Timeframe:

Options are thin on MDB and the skew-adjusted gamma exposure relative to average volume is basically zero so options are not a driving force of spot price. It looks choppy between 420-430 and strong call wall resistance at 450 and 460. I don’t really have an opinion otherwise on MDB.

MDB Trade Review

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Samantha is bullish:

Swing Timeframe:

DIS was first recommended to CLUB/EDGE clients on Jan 22nd as a swing long above 94.5 with a stop at 91 and price target of 99. Now that DIS has broken above key wkly level of 96.50, Samantha has pulled up her stop to 94 with these PTs still in play: 99, 102.45, 103.90. Getting/Staying above $104 (100W EMA) would be very constructive for nice continuation higher. No edge with earnings on 02.07.24, but she plans to hold. Should trade continue higher into EPS, suggests leaving a runner through EPS.

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Archna is bullish:

Chase Timeframe:

DIS is a bullish setup as it is on the weekly approaching the 100WK MA, but it has earnings next week . The easiest trade is to buy 100C for Feb 9th. (Earnings on 7th Feb). If we are above 100 before earnings then selling 105C to make it a free earnings call debit spread is how I am thinking about playing.

Rithika is bullish:

Chase Timeframe:

DIS broke out of a wedge last week and headed higher to complete wave A. Above 97 it can move up to fill the gap at 101.

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Tiffany is bullish:

Swing Timeframe:

DIS looks great above 96 with a potential move up to 100 - 102.2 range within the next two weeks. 100 is the call wall and 102.2 is the weekly one standard deviation. However there are two major macro events to watch out for on Wednesday - FOMC and QRA. I will be closing out most of my calls by Tuesday afternoon and will re-enter on Wednesday.

DIS Trade Review

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Samantha is bullish:

Swing Timeframe:

SNOW on breakout above 202 area. Gap fill on weekly of 193.14 and daily at 192.66 (white boxes), needs to hold. Bigger "protect to area": is 190 on daily and 181 on wkly depending on timeframe: swing/trend. Price target above 205.66 is 222 to start. Will update then.

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Archna is bullish:

Chase Timeframe:

I have Feb 2nd 210C. If we get to 205 then I will sell 212.5C for Jan 26th so as to take some risk down and hold it overnight. With a potential to make it a free 210/220 Call Debit Spread.

Rithika is bullish:

Swing Timeframe:

201.99 is currently resistance and SNOW is trading currently above the psychological 200 level. If it wants to break out to 220, it must defend 200. There is a lot of empty space above and has currently broken out of a symmetrical triangle.

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Tiffany is bullish:

Chase Timeframe:

SNOW is in a chop zone between 190 and 200. It needs to close over 200 on the daily to move to 210 which is the weekly one standard deviation move and a call wall for this week.

GET THE TRADE BEFORE IT HAPPENS