A perfect example of the market's recent strength comes in the form of McDonald's (MCD). Shares of the fast food giant have been looking strong all year, but they've gone parabolic in the last couple of weeks. As a result, investors have been pouring attention (and cash) into this stock.
McDonald's showed traders a near-textbook example of a cup-and-handle breakout on June 28, crashing through resistance at $83. While I'll concede that the stock's month-to-date price action is impressive, McDonald's is too far above its breakout level to be a justifiable trade right now.
I'd suggest waiting for McDonald's to show an intermediate reversal before buying. That said, there are similar plays that are only on the verge of making a big move right now.McDonald's, one of the 2011 Dividend Aristocrats, shows up on a recent list of Top Stocks to Buy and Hold Through 2011.
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