Double/triple top: MSFT falls first to $77, then eventually $70?
Well, sure looks to me that Microsoft (MSFT) has made a double top (and if you count the first peak a triple top).
The confirmation will be if MSFT falls below $87.
A few characteristics of a double top reversal (as published on stockcharts.com's description):
1. Prior Trend: Check.
2. First peak marks highest point of current trend: Check.
3. Trough--decline of at least 10%: Check.
4. Second Peak: Low volume (declining), meets resistance of previous high, and about 1 month passes between peaks: Check, Check, and Check.
5. Decline from peak: Expansion in volume and or accelerated descent: Pending/underway...looking to earnings on 4/26 to provide this gap down stimulus on significant volume (even with a beat, most companies are currently experiencing selling pressure post earnings).
6. Support break: Confirmed when MSFT breaks below about $87. New target at this point will be $77.
If the triple top pattern is in play here, then the next target after $77 (likely after an interval move to test the $87 line of support turned resistance at some point) will be about $70.
$70 would align well with my Elliott Waves and serve as a touch to the trend line where wave 4 that MSFT is currently forming would be complete.
Potential good news for the bulls is that if the above plays out, and they are still in their position at $70, I am looking for a 5th wave up after the trend line touch around $70. I will certainly plan to be going long for a period if MSFT gets to $70!
The confirmation will be if MSFT falls below $87.
A few characteristics of a double top reversal (as published on stockcharts.com's description):
1. Prior Trend: Check.
2. First peak marks highest point of current trend: Check.
3. Trough--decline of at least 10%: Check.
4. Second Peak: Low volume (declining), meets resistance of previous high, and about 1 month passes between peaks: Check, Check, and Check.
5. Decline from peak: Expansion in volume and or accelerated descent: Pending/underway...looking to earnings on 4/26 to provide this gap down stimulus on significant volume (even with a beat, most companies are currently experiencing selling pressure post earnings).
6. Support break: Confirmed when MSFT breaks below about $87. New target at this point will be $77.
If the triple top pattern is in play here, then the next target after $77 (likely after an interval move to test the $87 line of support turned resistance at some point) will be about $70.
$70 would align well with my Elliott Waves and serve as a touch to the trend line where wave 4 that MSFT is currently forming would be complete.
Potential good news for the bulls is that if the above plays out, and they are still in their position at $70, I am looking for a 5th wave up after the trend line touch around $70. I will certainly plan to be going long for a period if MSFT gets to $70!
Order cancelled:
Well, the $87 support was not broken, so the double top pattern was not confirmed and therefore no position would have been taken on this specific trade idea.