MSFT: Bear Market Risk Increases on Chinese Manufacturing News
Microsoft has been under heavy distribution and has begun a risk of top formation. The markets opened with a downside gap this morning due to Chinese markets imploding. This is a high risk factor for a potential bear market catalyst. Any US company that has a high revenue source from China is at risk of serious downside runs during such a crisis and for as long as the Trade Wars between these two nations continue. Sell Shorters will use this gap at open as a level to buy to cover for profits. IF the retail crowd does panic quickly, then it will be a rout.
For now MSFT is at risk of breaking to the downside. The Top formation is a Rounding Top, which is harder for most technical traders to recognize before completion. The support is strong between $86 – 98, which was a trading range from earlier this year. The stronger volume on down weeks and declining Accumulation/Distribution indicator show heavy large-lot selling over the past couple of months. The stock’s bounce risk levels are black lines on this weekly chart.
For now MSFT is at risk of breaking to the downside. The Top formation is a Rounding Top, which is harder for most technical traders to recognize before completion. The support is strong between $86 – 98, which was a trading range from earlier this year. The stronger volume on down weeks and declining Accumulation/Distribution indicator show heavy large-lot selling over the past couple of months. The stock’s bounce risk levels are black lines on this weekly chart.
Martha Stokes, CMT
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