RocketTraveler

MSFT: Double-Top, or Bull Flag Breakout?

BATS:MSFT   Microsoft Corp.
MSFT is showing a mixture of bullish and bearish signals; however, the most concerning of which is an active rug pull event which kicked off on March 16, 2023 at $265.20 via the 2D timeframe:


This coincides with a large RSI divergence event occurring on the larger timeframes; highlighting the potential for a double-top:


That being said, there appears to also be a major bull flag forming on the larger timeframes:


If we dive a bit deeper into the smaller timeframes and analyze the bull flag, we see another active rug pull at $345. This signals a high likelihood MSFT will hit $345 in the near future:


With a high degree of both bullish and bearish signals, it can be hard to discern where MSFT might be headed next.

We are keeping a very close eye on the AVWAP derived from the March 16 event as a guiding factor. Should the price significantly break below this level, we expect further drawdown to $265 will occur.

Comment:
First target at $345 has been reached. AVWAP very much in-tact. Awaiting signs of a reversal to begin targeting $265 range

Comment:
MSFT along with the broader markets saw an incredible boost in price during this past week. The RSI appears to be extended far above its moving average, signaling a likelihood that price action will consolidate from these levels or retest important support


We see a multi-year bearish divergence trendline in the RSI. As of today, MSFT has not yet broken this resistance. We feel this is the primary factor in determining whether the double-top (bearish) or bull-flag (bullish) outcome will ultimately occur. See below:

Comment:
Despite the bull-flag breakout, it appears the 4-year bearish divergence on the RSI was rejected at resistance. Until MSFT breaks this resistance, it is unlikely to make any meaningful momentum upwards.

Could this be a warning signal for the broader market as a whole as it nears ATHs?


Want to use the Rug Pull Detector on your own charts? Gain access here: www.patreon.com/RugPullDetector

Learn more about this powerful indicator here: www.tradingview.com/script/ZZ55skk4-Rug-Pull-Detector/
Disclaimer

The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.