The weekly chart is the main reason for my bullish bias. Last week, Microsoft had the earnings call and obviously the results were disappointing. However, the day opened with a huge gap and most of the selling had been done overnight. Price reached an extremely oversold position in a matter of days. This week however, the threatening picture of the previous week failed to spark more weakness. This is a lack of follow through which resembles very much with what happened during the summer in 2014 (circled period).
On the daily chart, I outlined two possible trades, depending on the trading style of each trader. I for one, am more inclined for the wide stop because after such a big fall, price can wiggle up and down for a consolidation and I am not comfortable with a close stop.
On the daily chart, I outlined two possible trades, depending on the trading style of each trader. I for one, am more inclined for the wide stop because after such a big fall, price can wiggle up and down for a consolidation and I am not comfortable with a close stop.