Yesterday I posted my long watch-list and on that long-watch-list I showed McDonald’s still on there despite a crazy head and shoulders pattern forming on the daily and the intraday charts.

If you know me for any time now, you’ll know that I steer away trying to trade against those obvious pattern types. 

However, just because I have a stock on the long-watch list doesn’t necessarily mean that I think they should be bought NOW. Instead, in the case of McDonald’s – I’m waiting. Waiting for the head and shoulders pattern to complete, and waiting for a solid bottom to form in the stock. 

The McDonalds franchise is in solid shape. By now you’ve probalby seen a number of their restaurants remodeled around where you live. They are really seeking after constant improvement to their name brand and image. 

Here’s some other areas of business that McDonalds is doing right:

• Stealing huge chunks of market share from the likes of Dunkin Brands (DNKN) and Starbucks (SBUX). Their coffee has been an incredible success and at a fraction of the cost. In times like these, where do you think customers will start getting their coffee-on-the-go from? 
• Also, on the SharePlanner Pro platform, we discussed how it is a lot easier to get through a McDonald’s drive through than it is a Starbucks Cafe. MCD values getting folks out of the drive through even trumping those who come inside the store, while SBUX looks to deliver the ‘experience’ and atmosphere for their customers. When it comes to time, MCD wins. 
• Watch Out Panera (PNRA) because the remodeling that MCD is undergoing is going to eat away at your market share as well. Sure they won’t offer the great sandwiches that PNRA and Atlanta Bread offers, but they are now offering WIFI at most of their stores and for the first time I can remember, every time I go into a McDonald’s, there are a number of people there with their laptops working, gaming, or something else that we probably don’t want to know about. 
• But one thing I would do, is hire more competent workers. MCD is notorious for getting orders wrong (though nowhere near as bad as Burger King) and having numerous in-store brawals getting posted on Youtube. Frankly – they need to clean this up, and follow the model of Moe’s or Chic-Fil-A for their hiring practices. 

So there you have it – my reasoning in a nutshell for why I’m Lovin’ it at some point with MCD once it bottoms.