Here I'm going to talk about how Microsoft seems to be mimicking its price movement at the end of August and what this means for longer-term movements.
Let me know how it goes for and how you view these recent movements
If this analysis helps, I'd really appreciate a like, it lets me know that what I'm doing is good work.
Most Tech Stocks have been moderately range-bound recently and further upside is looking possible but investors are wary of this year's Home Run sector coming to a plateau.
Most stocks in the Tech Sector are coming close to their upper valuations and it may be on some investor's minds that other sectors are ready for rotation.
As seen in the Chart MSFT has broken out of its recent gully and is moving towards previous highs however its pattern is strikingly similar to the end of August when investors will have rebalanced their portfolios in the hope of a value rotation. This is demonstrated by an increase in volume up to the 12th of October and now a reduction in volume, accompanied by shrinking Candle Body Sizes and increasing wick length. This could be an indication of fears of overextension causing profit-taking as the current price lies outside of the Upper Bollinger Bands and at the top of it's parallel channel.
Furthermore, failure to break the $225 resistance could be an indication to sell and wait for more buyers to come back in before prices move higher. This is consistent with an analysis I did recently suggesting a cup and handle pattern forming in the SPX500. Where profit taking occurs down to strong support and then further buyers move in on the opportunity driving prices even higher:
Therefore I believe a move down to $220-$218 (approximately the 50d MA) will occur prior to further movement over $225, however, this continued upwards push for MSFT must be accompanied by small movements down with low volume and high buying at these support points, to confirm that a potential cup and handle isn't in fact a double top.
Best of luck and Stay Disciplined
Let me know how it goes for and how you view these recent movements
If this analysis helps, I'd really appreciate a like, it lets me know that what I'm doing is good work.
Most Tech Stocks have been moderately range-bound recently and further upside is looking possible but investors are wary of this year's Home Run sector coming to a plateau.
Most stocks in the Tech Sector are coming close to their upper valuations and it may be on some investor's minds that other sectors are ready for rotation.
As seen in the Chart MSFT has broken out of its recent gully and is moving towards previous highs however its pattern is strikingly similar to the end of August when investors will have rebalanced their portfolios in the hope of a value rotation. This is demonstrated by an increase in volume up to the 12th of October and now a reduction in volume, accompanied by shrinking Candle Body Sizes and increasing wick length. This could be an indication of fears of overextension causing profit-taking as the current price lies outside of the Upper Bollinger Bands and at the top of it's parallel channel.
Furthermore, failure to break the $225 resistance could be an indication to sell and wait for more buyers to come back in before prices move higher. This is consistent with an analysis I did recently suggesting a cup and handle pattern forming in the SPX500. Where profit taking occurs down to strong support and then further buyers move in on the opportunity driving prices even higher:
Therefore I believe a move down to $220-$218 (approximately the 50d MA) will occur prior to further movement over $225, however, this continued upwards push for MSFT must be accompanied by small movements down with low volume and high buying at these support points, to confirm that a potential cup and handle isn't in fact a double top.
Best of luck and Stay Disciplined
