Dow stock McDonald's just exited a correction, and one technician sees record highs on the way

Dow laggard McDonald’s just jumped out of a correction. Here’s how to play it now

Investors appear to be having a Mac attack.

After languishing for much of 2018, McDonald's shares have come to life, rising nearly 3 percent last week. One technician sees more gains to come.

"The stock has formed what many technicians refer to as a symmetrical triangle pattern — recent lower highs but yet higher lows since January," technical analyst Mark Newton of Newton Advisors told CNBC's "Trading Nation " on Friday.

After hitting an all-time high in late January, McDonald's shares sold off into February and hit the year's lows in early March. Since then, it has traded in a tight, but ascending, range.

"It really won't take much until you get back up above $166, which I feel is going to fuel a move to right near $190 in the stock, and so it's still difficult to be real bearish," Newton said.

McDonald's traded just shy of $166 at its market close on Friday. It last closed above that level in June. Its shares are still another 15 percent rally from $190, a level that would mark a new record well above its last at $178.70.

Its sell-off earlier this year also has to be put into the context of its long-term uptrend, according to Newton.

"It's important to really put this into bigger perspective and look at how the stock has trended since the rise started in 2015, the level of its most recent longer-term lows," he said.

While McDonald's is a consumer discretionary stock, its high-dividend yield and consistent growth serves it well as a defensive play, much like a staples stock, says Larry McDonald, editor of the Bear Traps Report.

"If you look over the last two months, value and staples have been outperforming growth since July," McDonald said on "Trading Nation" on Friday. "We want to be overweight value XLP [the staples ETF] versus the XLY [discretionary], and we want to be overweight staples and value right here, including stocks like McDonald's. "

McDonald's hiked its dividend yield on Friday for its 42nd year in a row. Its 2.4 percent yield is higher than the S&P 500's 1.8 percent average.