A perfect example of the market's recent strength comes in the form of McDonald's (MCD - Get Report). 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.