Today we will take a look at MSFT. The 2nd company in the S&P500 based on market cap.
The main bullish structure we have is the ascending channel, which started in March 2020 (bottom of the bearish market, after covid 19). Now the price is above that structure again, and we should assume that the structure is still working as a dynamic support.
The main bearish structure is the current corrective pattern (yellow lines). This pattern was formed since the bearish movement that started in November 2021.
Ok, nice, but how can I use this analysis?
My view based on the rejection in the support zone + the ascending trendline, is that we may observe a bullish movement towards the higher trendline of the current corrective pattern (yellow line). Therefore, if I were someone developing short-term setups, I would think of closing my setups there.
Alright, what if the price doesn't move as expected? That's always a possibility, that's why if the price makes a new low on the red horizontal line, that would be a bad sign for the bullish perspective, and I would assume a bearish movement towards the next support zone at 240.00
The main aspect here is not to develop biases in one direction. I have concluded that it doesn't matter how good a situation is; the price can always do the opposite, that's why I always think in bullish and bearish terms, and I develop setups only if the price full-field filters that I defined in advance. Otherwise is just an analysis of possible directions that help me stay up to date on the chart's price action.
Thanks for reading; feel free to share your review in the comments.
The main bullish structure we have is the ascending channel, which started in March 2020 (bottom of the bearish market, after covid 19). Now the price is above that structure again, and we should assume that the structure is still working as a dynamic support.
The main bearish structure is the current corrective pattern (yellow lines). This pattern was formed since the bearish movement that started in November 2021.
Ok, nice, but how can I use this analysis?
My view based on the rejection in the support zone + the ascending trendline, is that we may observe a bullish movement towards the higher trendline of the current corrective pattern (yellow line). Therefore, if I were someone developing short-term setups, I would think of closing my setups there.
Alright, what if the price doesn't move as expected? That's always a possibility, that's why if the price makes a new low on the red horizontal line, that would be a bad sign for the bullish perspective, and I would assume a bearish movement towards the next support zone at 240.00
The main aspect here is not to develop biases in one direction. I have concluded that it doesn't matter how good a situation is; the price can always do the opposite, that's why I always think in bullish and bearish terms, and I develop setups only if the price full-field filters that I defined in advance. Otherwise is just an analysis of possible directions that help me stay up to date on the chart's price action.
Thanks for reading; feel free to share your review in the comments.