The two companies are now working together, albeit in a limited test run. McDonald's will run a 12-week test of Beyond Meat's patties in 28 locations throughout Ontario.
Burger King has found solid traction using the Impossible Burger in its stores, and the hope for McDonald's investors is that this beef alternative is an extra growth lever for the future.
But what does the move mean for the stocks? Just the other day, Beyond Meat stock looked to be rolling over, finally working off the rest of its post-IPO momentum. For McDonald's, shares are trying to push back above the 50-day moving average and up to its prior highs. Let's take a closer look.
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Trading Beyond Meat and McDonald's Stocks
Let's start with Beyond Meat, one of the most successful IPOs we've seen in quite some time.
Shares have been buoyed in mid-$130s and the 50% retracement near $142. However, this support area was threatening to break as the 50-day moving average and 61.8% retracements were acting as resistance. Further, downtrend resistance (blue line) was forcing a series of lower highs in BYND stock.
However, bulls have to be careful. Beyond Meat stock is fading from its opening highs and remains below all of the current resistance levels we just laid out. Over $166 puts a rally to the 78.6% retracement on the table. Below $166 keeps the $135 to $142 support area on watch.
Should support fail in Beyond Meat stock, traders will eventually be looking for a gap fill back toward $100, which is shown via the blue box above.
Turning to McDonald's stock below, investors can see its strong bounce from the 100-day moving average and the 78.6% retracement.
However, the $215 level has proven to be significant this quarter and is now acting as resistance; so too is the 50-day moving average.
Trading Beyond Meat stock can be very difficult as it makes violent and volatile moves with its low float. Conversely, McDonald's has a much larger market cap and float, so the moves tend to be less extreme.
In the setup above, try to keep it simple. Above $215 puts the $221 highs on the table. Below $215 and a retest of the 100-day moving average is possible. Below the 100-day and a retest of the 78.6% retracement is in the cards.
This article is commentary by an independent contributor. At the time of publication, the author had no positions in the stocks mentioned.