These two MEGA Caps hit New Historical High quietly

$AstraZeneca PLC(AZN)$ AstraZeneca PLC (AZN) and $McDonald's(MCD)$ McDonald's (MCD) are two well-known companies with market capitalization above 200billion that have hit new historical highs in the stock market yesterday.

AstraZeneca PLC (AZN) new historical high 72.481

AZN weekly chart

AZN day chart

• AstraZeneca PLC is a British-Swedish multinational pharmaceutical company that has been making news recently with its drug combo that met ovarian cancer study goals. Some of you might also had been injected with Covid-19 vaccine from this company.

• The news has helped AstraZeneca reached a new historical high of 72.481 yesterday (5 April 2023)

• Based on day chart, Relative Strength Index (14-day time frame) is at 76.79. Well within the overbought region of above 70.

• Tom Demark TD9 perfect sell also formed indicating a possible reversal from the current uptrend

• The short-term support is around 63.63

• If there is a correction, one can consider selling Put Options at below 63 at a comfortable time frame and reasonable profitable premium. For reference, the last trading price for Put Options at the strike price of 62.5 expiring on 23 July 2023 is $0.76. $AZN 20230721 62.5 PUT$

MCD new historical high of 284.98

MCD weekly chart

MCD Daily CHart

• McDonald's, on the other hand, is a well-known fast-food chain that has recently made headlines with its temporary office shutdown in the US as it prepares for layoff notices.

• Despite this news, MCD reached a new historical high of 284.98 yesterday (5 April 2023)

• Based on day chart, Relative Strength Index (14-day time frame) is at 70.27. It is within the overbought region of above 70

• Tom Demark TD9 reached the count of 9 two days ago on 4 April 2023 but the perfect sell did not form.

• The next two support levels are around 276 and 260.

• If there is a correction, one can consider selling Put Options at below 260 at a comfortable time frame and reasonable profitable premium. For reference, the last trading price for Put Options at the strike price of 260 expiring on 5 May 2023 is $0.92, $MCD 20230505 260.0 PUT$  

• If one is more aggressive and has enough margin, one can consider selling Put Options at below 276. For reference, the last trading price for Put Options at the strike price of 275 expiring on 21 April 2023 is $1.05. $MCD 20230421 275.0 PUT$

What to consider when your stock reaches a new high

When a stock is on an uptrend, there are different phases with unique factors that require different risk management and profit objectives. When the stock reaches a new high that it has never traded at before, it can be a great opportunity to make money but you need to have some technical know-how to take advantage of it.

One important thing to note is that when a stock reaches a new high, it means that there aren't a lot of people who are selling the stock at a loss, which is good news for buyers. However, there are still hidden obstacles and challenges that can cause unexpected behaviour in the market and lead to emotional decision-making.

To make sure you're prepared, there are some rules you should follow:

• The first rule is to categorize the progress of the breakout into three phases: the action phase, the reaction phase, and the resolution phase. During the testing phase, it's best to avoid buying more of the stock unless the price drops significantly and you can get in at a good risk/reward location.

• The second rule is to review the pattern structure leading up to the breakout. If the price structure shows a basing pattern that's not too deep in the prior trading range, that's a good sign. But if the price runs straight up into the breakout level without building a consolidation pattern, it could be a sign that the rally wave will exhaust the uptrend and lead to a correction.

• The third rule is to locate hidden resistance levels at new highs. Basically, you start by looking at the lowest point that the stock price has been trading at recently, and then find the point where the price broke out of that range and started going up. If it goes higher than that level, it's a good sign that the breakout will continue to succeed. But if it doesn't reach that level, it could be a sign that the breakout might fail. As the stock continues to go up, you'll encounter other levels of resistance that you marked out. These can be useful to take profits, unless you're planning to hold onto the stock for a long time.

• And the fourth rule is to find your profit protection price. This means setting a minimum profit that you'll take if the uptrend reverses, and avoiding physical stops because they can be targeted by predatory algorithms that move modern markets.

• Finally, the fifth rule is to consider additional exposure. This can be a great way to make more money, but you need to be careful not to buy at the wrong time. Only add to your position when the risk/reward location is advantageous, like during a sell-off into a moving average or when the stock clears a fresh barrier.

Overall, when a stock is on an uptrend, there are a lot of factors to consider, but by following these rules and staying vigilant, you can take advantage of the opportunities that arise and make the most of your investments.

Thank you for reading. Those who are holding MCD and AZN, please let me know your plans in the comments below.

@CaptainTiger

@MillionaireTiger

@TigerStars

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