McDonald's Plunges 6%, But Traders See Buying Opportunity Ahead

McDonald's (NYSE:MCD) shares have taken a hit in recent days, plummeting by more than 6% in just three days. The company revealed its future plans, and investors were less than impressed.

The selloff may present a buying opportunity for traders, as the shares are both oversold and at support levels.

Oversold conditions occur when emotional and aggressive sellers push the stock below its normal trading range. This can be seen in the Relative Strength Index (RSI), which is currently below the horizontal red line.

Many trading strategies rely on mean reversion, where oversold conditions draw buyers into the market, anticipating a move higher.

McDonald's is currently at a support level of $235, which has been a critical price point in the past. In October 2023, shares found support around this level before rallying afterward. Some remorseful sellers may be reentering the market as buyers, creating support once again.