Microsoft....

 Chinese New Year is getting near and we are having a re-union. My brother and sister in-law arrived today and it is a pleasant feeling since it has been 2 years since we last gathered in Malaysia.

while we were sitting around the living room, my sister in-law talked about her recent investment adventure. She bought Microsoft during July last year and only to release it just this week as it was dropping, and somehow she regretted her action, hoping that Microsoft will return to the level she let go of her stocks so that she can buy it back.

It caught my interest and up-loaded the chart.

Fig 1 Microsoft Daily Chart

She mentioned that she uses the daily chart and she is particularly interested in a 200-day moving average. While I did not show it in the chart, the 200-day moving average was in fact supporting Microsoft on 24th January 2022. In another word my sister in-law sold at the bottom of the wave.

To be honest, I fiind it a little difficult to interpret this chart, mainly due to influence of the Dow Jones, which is on a down trend. So I have to put that influence aside and focus on this counter.

Base on my system, there is sign of reversal on 24th January 2022. While not really hammer with a small body, it nevertheless comes with a very long tail. I would have entered this trade based on my system.  What's troubling me is the subsequent 2 days, especially the second, while climbing up, they continued to turn red while gapping. It i not giving me confidence in this counter.

Moreover, the descend is steep since 29th December 2021, I am quite certain that it is in the process of changing its trend downward. So while it is going up, I tend to feel that this is likely a counter wave, it may stop aby the 55-day moving average.

If that is the case, we are seeing head and shoulder on Microsoft and more downside thereafter.

At the moment, I would say that there is not sufficient data on its direct. What of the weekly chart then?

Fig 2 Microsoft weekly chart

Surprisingly I am seeing a similar bar on the weekly chart. It is a color change with long tail pointing downward, it is however supported by 55-week moving average. The steepness of the descent is similar to that of the climb. I can't properly judge its trend, more observation needed.

The MACD on both charts have not shown any indication of divergence, therefore there is no signal telling the trader if it is reversing.

However, if I am to look at a much earlier incident, there is a similar situation on the 8th of March bar, the following bars descended below the moving average before climbing further up. So there is a chance that Microsoft have not yet reach its bottom, it has to "test" the support of 55-week moving average. 

The next 2 weeks are every important for Microsoft, t is even possible for Microsoft to confirm its change of trend if it breaks the 55-week moving average.

Alignment....

Just a few post earlier. I was wondering why Dow Jones was not aligned with Nikkei. This week it seems they are aligned again.

Fig 1 Dow Jones weekly index

Fig 2 Nikkei weekly index

In this case, I am more certain that Nikkei is on a down trend than Dow, it is more decisive in breaking through the 55-week moving average. 

Dow on the other hand still hovers above the 55-week moving average.

Hang Seng Up-date

 A few weeks ago, I did a post-Christmas up-date on Hang Seng. A small reversal bar just formed at 61.8% Projection Support level. 

In general, I would consider if reversal at this Fibonacci point, it is likely to be on a correction. Further more, I was uncertain at the time since it was a single reversal bar, I have decided to let it develop further for a few weeks before looking at it again.

Fig 1. Hang Seng weekly Chart

So few weeks have past and there were 2 more bars of uncertainty, but the one dated 2nd Jan 2022 has a significantly longer tail pointing downward, and a nice long bar just formed on week of 9th Jan 2022, It is quite firm that Hang Seng is reversing up. The question to me is whether this is more short or long term?

The lines I drew on the chart are not trend lines, they are merely an indication of the trend gradient. One of my ways to tell if it is of main or counter trend is by looking at the gradient, a gentle gradient most likely mean counter trend while steep gradient main trend. The issue here however is that both gradients are the same. I can't use that for estimation.

Looking at MACD, it is clear that there is a divergence against the chart, so We are seeing potential reversal, but with such divergence, there tend to have 1 more dip before moving up. So I will assume a likely short term reversal. How far do I think it will go then?

Well, it did cross the 8-week moving average. It is likely to be temporarily stopped by 21-week moving average, forming a flag or pennant while supported by 8-week moving average. It should push towards 55-week moving average before reversing downward.

Now this is just a prediction and market does change its mind all the time. So be vigilance in monitoring its development.

A look at FTSE 100

 So far my TA is limited to Dow Jones, Hang Seng and Nikkei.

Lately, a thought came into my mind. May be I should look at more charts during the weekends? If so, what counters may be relevant to me? FTSE came to my view.

Fig 1. FTSE100 Weekly Chart

On the first look, FTSE is on an up-climb. The only Issue I have with it is the gradual gradient of the climb. There seems to be a lacking in excitement after the correction started 1st March 2021, Timing seems to coincide with the worldwide outbreak of Covid-19 (Wuhan virus).

Nevertheless, FTSE is till now supported by its 55-week moving average. Yes, the climb is gradual and as far as I can see, it will continue in the short run.

I am really not into this counter, it opens at 4:00PM in my time zone. This timing coincides with my starting to prepare my family's dinner, yes.  I am the chef of the family.

If I am in this market, I will continue to go for long until abnormality.
 

I have placed 2 Projection measurements on this chart since there are 2 corrections. I have also placed a retracement measurement due to the steep drop.

At present, FTSE has broken through the 100% projection and 78.1%% retracement line. While restricted by Bollinger envelop, signs are still indicating long. So where are the resistance.

I will put my attention on 2 ranges: 7,699 to 7,784 and if this is broken through, 8,184 and 8,296.

Consider the wave pattern, I estimate that FTSE is likely in counter wave since March 2020. It has not yet surge pass its previous high of May 2018 and January 2020. The range between 7,699 and 7,784 seems a plausible area for reversal.

Still I will need to see some drastic move like a reversal bar with long but failed penetration into the zone before it can be confirmed as reversal.

Anyway, time is the proof if I am right or wrong on this one.

Dow and Nikkei side by side

 A happy new year to everyone, although I feel that I am the only one in this blog, but still just in case.

I am doing my home work and for a change, I have placed both Nikkei and Dow side by side. 

Fig 1. Nikkei Dow Jones weekly chart side by side

It is interesting to note how Nikkei and Dow conform to each other move since April 2020, that was until Febuary 2021 where Nikkei went into a correction phase while Dow continued to climb. This was probably because The US government continued to pump money into the country through as form of Covid-19 subsidies while Japan was more stringent in its spending. 

Personally, I do not like this form of  "subsidies", it is an alternate form of bribe to the people and more like a quick fix instead of being a long term solution. Governments using this strategy are normally incompetence in its management of the country. The result is having more people being dependent on handout, becoming complacence and demand for more.  

For the time being, the climb of Dow Jones is stronger than Nikkei, evidence from the gradient of the 55-week moving average, Nikkei one the other hand is more gradual.

Further more, Dow Jones managed to climb higher by the end of 2021 while Nikkei apparently  in a congestion bad. I consider both indices may part their ways in the near future, at least temporarily. 

Placing Projection measurement, I am looking at a down trend on Nikkei bounced from 27.650 level but did not gain much momentum up-ward, instead it is in a congestion with bars overlapping each other. Once it break the 55-week moving average, the next support level will be between 27,191 and 27,214.

Dow Jones on the other hand may still have some where to go after breaking the previous high of 36.564. The next level of resistance will be between 37,035 to 37,885.

In the longer term however, I am seeing divergence in Dow's MACD. As such we will still need to prepare for a reversal for Dow.