McDonald’s Corporation is approaching a pivotal earnings release. The stock is currently trading near an upward trendline, established by connecting lows from June and October, which may prompt a move lower.

With McDonald’s being a globally recognised fast-food brand, its earnings often attract attention from traders. Historically, such periods see high levels of trading interest, given its established business model and wide consumer reach.

The current price action presents a noteworthy support zone at $283.50, corresponding with June’s low pivot. If the stock breaks lower due to the earnings announcement, this level may prove crucial as it historically served as a strong reference point.

Trading around earnings, particularly for prominent brands like McDonald’s, requires careful risk management due to potential volatility. Monitoring these developments is essential to respond effectively to the stock’s movement post-earnings.

As we look at McDonald’s in the coming weeks, the technical structure appears to be setting up for a potential move lower once again. The stock is trading near the top of its recent range, and given the current market sentiment, we are preparing for a possible pullback. This pattern feels familiar to conditions we observed in the past.

Recent economic data supports this cautious view, especially after the latest earnings report from late October 2025. That report showed that same-store sales growth slowed to 3.1%, missing expectations and marking a significant deceleration from the 5.5% growth we saw in the same quarter last year. This slowdown suggests consumers are becoming more sensitive to price, a trend we expect to continue.

Looking back at the chart history from early 2025, we can see that a similar technical setup led to a sell-off where the stock found support near the $283.50 level. That historical pivot proved to be a meaningful floor for the stock, and we are watching it as a primary target if weakness emerges. This makes that price point a key level for setting potential profit targets on bearish trades.

For derivative traders, this outlook suggests that buying put options could be a straightforward way to position for a decline. A strategy could involve purchasing puts with strike prices near or just below the $283.50 support zone, anticipating a break of that key level. This would offer a direct way to capitalize on downward momentum if the stock fails to hold its current highs.

Given that implied volatility has been elevated, another approach would be to use credit spreads to position for either a decline or sideways movement. A bear call spread, for instance, would allow us to collect a premium while defining our risk if the stock remains below a certain price. This strategy can be effective in a market where outright option purchases are expensive due to higher volatility.

As always, disciplined risk management is crucial, particularly with ongoing uncertainty around inflation and consumer spending. We are letting the price action confirm the direction and will use well-defined strategies to manage our exposure. Staying patient and waiting for a clear break of the trend will be key to navigating the next few weeks.