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An update on two short positions: McDonald's Corporation (NYSE: MCD), recommended on June 26, 2009 at a price of $57.00, and Fortune Brands (NYSE: FO), recommended on the same day at a price of $35.56.McDonald's: Hold Short. MCD's shares remain under pressure. The era of the 'frugal consumer' is well underway in the United States, to McDonald's detriment. There's also a trend away from standardized fast food, and toward local, 'roadside' hamburger joints and diners: they offer unique flavors and recipes, fresher food, and often atmospheres that can't be beat.
Technically, MCD's stock chart is in a downtrend and has had trouble staying above the 50-day moving average -- a bearish signal. Cover Short on a bounce off $50, $45, $40, or $35. Buy/Stop Loss if you were to sell shares in this company: $67.
Fortune Brands: Cover Short. They don't all work out. Unexpectedly, the cutback in consumer spending so far has not hurt FO. Further, technically, FO's stock chart has broken above the 50-day moving average, has held a re-test of that support, hence it's best to cover the short and take the $8 loss.
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Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.
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