One way for investors to spot a stock that has been picking up steam is by looking at its moving average (MA). In particular, when the 50-day MA cross above the 200-day MA, that's referred to as a "golden cross" and is a bullish buying signal. That doesn't mean that the stock will continue rising higher, but it's usually a good sign that there is some positive momentum behind it.
Fast food giant McDonald's (NYSE:MCD) is coming off a strong earnings report and as a result, its shares have been surging. In July, the company reported its second-quarter numbers which showed that despite price increases, its business is still doing well. It has been negatively impacted by the closure of its stores in Russia and Ukraine. Revenue of $5.72 billion was slightly below the $5.81 billion that analysts were expecting in Q2. But on the bottom line, McDonald's adjusted earnings per share of $2.55 was better than Wall Street projections of $2.47.
The stock was picking up steam before the earnings release as investors have been bullish on the global economy's return to normal. But in mid-August, the stock's 50-day MA finally jumped above the 200-day MA, completing the bullish crossover. Year to date, shares of McDonald's are flat, but that's still far better than the S&P 500's 11% decline during the same period.
McDonald's has proven to be a resilient stock this year even amid inflation and could be an excellent buy to hang on to. Its dividend yield of 2.1% is above the S&P average of 1.5% and gives investors an additional incentive to hang on to it for the long term.
