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.