Background: MSFT Microsoft Corporation, Technology | Business Software & Services | USA
Microsoft Corporation, a technology company, develops, licenses, and supports software products, services, and devices worldwide.
Some other competitors or constituents of the industry groups are:
Alphabet Inc (GOOGL)
Apple Inc (AAPL)
Cisco Systems Inc (CSCO)
Oracle (ORCL)
Charts of these with notes are shown below
Summary of technicals:
1. MSFT is constituent of NASDAQ100 (see chart below) which appears to be in a process of forming a double top with 2000 high and could be in early stage of reversing.
2. MSFT Monthly chart (see below) might be in a process of forming a flat correction of 3-3-5 configuration in which it has formed 3 swing decline from 2000 high and likewise has bounce in 3 swings to recent high retracing 88.6% of the previous decline. If correct we could be in early stage of 5 wave decline.
3. There is a RSI divergence between waves 3 and 5 highs of the final move into recent high.
4. On weekly it might have minor support at $48 area and could bounce a little to enable us to get filled.
5. Other competitors and constituents of the industry group also appear to be forming a top or are already in bearish cycle.
Conclusion:
There could be some alternative counts at play but likely with similar outcome, namely that a significant decline is in prospect with initial target approx $40 where short term support might develop and in due course drop to $23 area as secondary target.
Action:
Consider buying Jan 2017, $35 PUT option for $0.50 or better, it current is quoted $0.51 - $0.53 that is with 2 cent spread.
If price drop to $45 our profit could be 2 x our initial risk and would be approx 4 x if it drops to $40 area.
Warning: This is my interpretation of price action using TA approach that I consider helps me the most but could be completely wrong. Therefore as always, please do your own analysis for your trade and risk management. You should follow this on Paper Trading Account till you feel confident to apply the skill to a live account.
DanV
danv-charting.com
Microsoft Corporation, a technology company, develops, licenses, and supports software products, services, and devices worldwide.
Some other competitors or constituents of the industry groups are:
Alphabet Inc (GOOGL)
Apple Inc (AAPL)
Cisco Systems Inc (CSCO)
Oracle (ORCL)
Charts of these with notes are shown below
Summary of technicals:
1. MSFT is constituent of NASDAQ100 (see chart below) which appears to be in a process of forming a double top with 2000 high and could be in early stage of reversing.
2. MSFT Monthly chart (see below) might be in a process of forming a flat correction of 3-3-5 configuration in which it has formed 3 swing decline from 2000 high and likewise has bounce in 3 swings to recent high retracing 88.6% of the previous decline. If correct we could be in early stage of 5 wave decline.
3. There is a RSI divergence between waves 3 and 5 highs of the final move into recent high.
4. On weekly it might have minor support at $48 area and could bounce a little to enable us to get filled.
5. Other competitors and constituents of the industry group also appear to be forming a top or are already in bearish cycle.
Conclusion:
There could be some alternative counts at play but likely with similar outcome, namely that a significant decline is in prospect with initial target approx $40 where short term support might develop and in due course drop to $23 area as secondary target.
Action:
Consider buying Jan 2017, $35 PUT option for $0.50 or better, it current is quoted $0.51 - $0.53 that is with 2 cent spread.
If price drop to $45 our profit could be 2 x our initial risk and would be approx 4 x if it drops to $40 area.
Warning: This is my interpretation of price action using TA approach that I consider helps me the most but could be completely wrong. Therefore as always, please do your own analysis for your trade and risk management. You should follow this on Paper Trading Account till you feel confident to apply the skill to a live account.
DanV
danv-charting.com
