- WE'RE JUST RANDOM SPECKS OF DUST IN A TORNADO TO THE MARKETS .......
- CHARTISTS MUST PUT ALL BIAS ASIDE AND LET THE CHARTS DO THE TALKING OR WE'LL SEE ONLY WHAT WE WANT TO SEE
- This blog has a copy of all header posts that I publish anywhere, so that those interested in seeing what my thoughts are on the markets can find them easily.
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Wednesday, 27 April 2011

MSFT - Dangerous Long Here

This is my first post at SharePlanner. What I'm planning to focus on here is mainly individual stocks with some commodities. For the stocks Ryan and I think it might be interesting if I chart up some of the picks here to see what I see on the chart. I'm going to aim to do one or two of these a day & will be trading the charts I like best.

My first pick is one that Ryan mentioned on twitter this morning and that's MSFT. That has made an encouraging double bottom with positive RSI divergence as Ryan mentioned. Looking longer term at the chart though there are a couple of worrying aspects to it:

Firstly, after breaking down from a rising channel the broken lower channel trendline is now acting as resistance. That may hold as resistance. Secondly the recent double-bottom was at an H&S neckline. That H&S may fail but a move to test the resistance level in the 27 area would be normal enough with that having been the height of the left shoulder on the pattern.

If MSFT manages to break up through double resistance in the 27 area,  then it would look more interesting, but there's also declining resistance from the 2007 high at slightly over 29, so upside may in any case be limited.

Overall this looks best avoided, though it could be an interesting spec short in the 27 area with a tight stop if the 60min RSI looks encouraging there.

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