I have been initiating coverage on the "Mega-Cap Tech Stocks" because their influence on the indices is so strong, in an effort to get a better feel for where, specifically, the S&P 500 will go from here.
Whereas in my coverage of Amazon and Facebook earlier tonight, in which I was able to discern some classical chart patterns, with Microsoft, I have not been able to. However, I do see two structures that might give us some clues.
There is a fairly well-defined bullish channel (yellow) which emerges on the weekly chart, which Microsoft flew through in the exuberance of last fall's trading. That blowoff top used the slope of a line (red) as support until the very end.
If we extend that line to this second blowoff top, it appears to now be serving as resistance. A healthier bull run would have MSFT moving at a steadier pace in that regular channel. Given the bearish patterns I discerned on Amazon and Facebook, to say nothing of the risks facing the economy at this time, I expect Microsoft to correct with the other tech giants in the coming days and weeks.
Whereas in my coverage of Amazon and Facebook earlier tonight, in which I was able to discern some classical chart patterns, with Microsoft, I have not been able to. However, I do see two structures that might give us some clues.
There is a fairly well-defined bullish channel (yellow) which emerges on the weekly chart, which Microsoft flew through in the exuberance of last fall's trading. That blowoff top used the slope of a line (red) as support until the very end.
If we extend that line to this second blowoff top, it appears to now be serving as resistance. A healthier bull run would have MSFT moving at a steadier pace in that regular channel. Given the bearish patterns I discerned on Amazon and Facebook, to say nothing of the risks facing the economy at this time, I expect Microsoft to correct with the other tech giants in the coming days and weeks.