Benzinga
Published Jun 28, 2022 17:39
Updated Jun 28, 2022 18:10
Here's Why Microsoft Stock Is Trading Lower And What It Means For The Immediate Future
Microsoft Corporation (NASDAQ: NASDAQ:MSFT) opened lower on Tuesday and continued to fall intraday, in sympathy with the S&P 500, which failed to gain bullish momentum when it popped over Monday’s high-of-day.
Microsoft also had an initial bullish move higher but rejected the 50-day simple moving average for the third trading day in a row, which enticed traders to sell their positions.
Regardless of the retracement, Microsoft is trading in an uptrend pattern on the daily chart. An uptrend occurs when a stock consistently makes a series of higher highs and higher lows on the chart.
The higher highs indicate the bulls are in control while the intermittent higher lows indicate consolidation periods.
Traders can use moving averages to help identify an uptrend, with rising lower time frame moving averages (such as the eight-day or 21-day exponential moving averages) indicating the stock is in a steep shorter-term uptrend.
Rising longer-term moving averages (such as the 200-day simple moving average) indicate a long-term uptrend.
A stock often signals when the higher high is in by printing a reversal candlestick such as a doji, bearish engulfing or hanging man candlestick. Likewise, the higher low could be signaled when a doji, morning star or hammer candlestick is printed. Moreover, the higher highs and higher lows often take place at resistance and support levels.
In an uptrend the "trend is your friend" until it’s not and in an uptrend there are ways for both bullish and bearish traders to participate in the stock:
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The Microsoft Chart: Microsoft’s uptrend began on June 14, when the stock formed a bullish double bottom pattern at the $241.53 level, when paired with similar price action the trading day prior. The stock’s most recent higher low within the uptrend was printed on June 22 at $250.37 and the most recent higher high was formed at the $268.30 mark on Monday.
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