A friend of mine asked me if it was a good time to buy
Microsoft now as it had come down from its high. Show below is daily chart on
MSFT.
MSFT has been in a downward signal since the end of last
year. It is still in the throes of multi-month pullback - see the blue line
sloping down touching the local highs and being unable to cross the trend
line... I would wait for that trend line to be broken and an uptrend to be
established before going back in. In an uptrend the 50 day ema should be above
the 200 day ema ... It is currently opposite of that. If you are a contrarian or
aggressive investor then you could enter... but I am not.
So far the price is holding above its support which is
around $38-$40. It may start moving up or could break down below $38. One could
take a chance and buy keeping the $38-39 as a stop loss level depending on
appetite for loss.
I prefer to trade the uptrend by buying on dips ... for
example you will see on the chart larger arrows which give the primary trend
direction and small arrows which are the contrarian signals suggesting when you
can buy on the dip if the larger arrow is also pointing up. Earnings
season has begun. Perhaps the market is waiting for earnings news to decide which
way to turn.
No comments:
Post a Comment