Microsoft (
MSFT
) has been on a bull run since the AI hype started. Despite a correction that pulled it down all the way to $310, it has recovered well and continues to stay strong. However, after analysing its most recent bull run and using the RSI indicator, I have concluded that it has exhausted its bull run and is ready to take another correction.
As can be seen in the above image, the share price made a new Higher High on 28th November. A previous high of $376 was achieved on 16th November.
During this time, the RSI indicator made a lower high as can be seen in the above image.
What does this mean?
In the above case, the RSI does not make a new high when the stock price makes a new high. This shows that the momentum is weakening and trend riders may want to book their profits.
As a consequence, the share price stalls and with fewer buyers and more profit takers, the likely path for the share price is downwards.
Dark Cloud Cover
Moreover, the candlestick pattern formation shown in the figure below also shows bearish sentiments. The closing candle on 29th November confirmed the formation of 'dark cloud cover'.
Dark cloud cover shows a shift in momentum to the downside.
Together with the RSI divergence, it seems
MSFT
is headed south.
What do you guys think about this?
MSFT
) has been on a bull run since the AI hype started. Despite a correction that pulled it down all the way to $310, it has recovered well and continues to stay strong. However, after analysing its most recent bull run and using the RSI indicator, I have concluded that it has exhausted its bull run and is ready to take another correction.
As can be seen in the above image, the share price made a new Higher High on 28th November. A previous high of $376 was achieved on 16th November.
During this time, the RSI indicator made a lower high as can be seen in the above image.
What does this mean?
In the above case, the RSI does not make a new high when the stock price makes a new high. This shows that the momentum is weakening and trend riders may want to book their profits.
As a consequence, the share price stalls and with fewer buyers and more profit takers, the likely path for the share price is downwards.
Dark Cloud Cover
Moreover, the candlestick pattern formation shown in the figure below also shows bearish sentiments. The closing candle on 29th November confirmed the formation of 'dark cloud cover'.
Dark cloud cover shows a shift in momentum to the downside.
Together with the RSI divergence, it seems
MSFT
is headed south. What do you guys think about this?