This is the fifth time since last June that MSFT is testing its
200-day simple moving average. In general, the higher the number of
testes in a given time period, the higher the probability that there
will be a downward violation and a start of a downtrend.
Yesterday MSFT closed at $30.16, just 2 cents above its 200-day
simple moving average at $30.14. It may be seen from the above daily
chart that the 200-day simple moving average has been acting
as protection against a violation of the lower trendline of the
up-channel that started in June of this year. Any violation of the
double support – SMA(200) plus up-trendline – could signal a move
towards the lows of June near $28.30. Notice however that the successive
tests of the SMA(200) have created a series of intermediate possible
support levels in between that must be also tested.
I am looking at MSFT for any hints about short-term market direction
because it is the third largest US company with a
$252.84B capitalization as of yesterday's close, right after AAPL and
Disclosure: no relevant position at the time of this post and no plans to initiate any positions within the next 72 hours..