MSFT finds buyers at key support level
Microsoft Corporation (MSFT) Technical Analysis Report for Sep 10, 2019 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, MSFT ended Tuesday at 136.08 losing $1.44 (-1.05%), underperforming the Nasdaq 100 (-0.23%). Closing below Monday's low at 136.46, the market confirmed its breakout through the prior session low after trading up to $1.95 below it intraday.
Daily Candlestick Chart (MSFT as at Sep 10, 2019):
Tuesday's trading range has been $2.38 (1.74%), that's slightly above the last trading month's daily average range of $2.33. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for MSFT.
One bullish candlestick pattern matches today's price action, the Hammer.
After trading down to 134.51 earlier during the day, Microsoft bounced off the key technical support level at 135.08 (S1). The failure to close below the support could increase that levels importance as support going forward. When prices bounced off a significant support level the last time on August 28th, MSFT gained 1.89% on the following trading day. The stock closed back below the 50-day moving average at 137.30 for the first time since September 3rd.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "3 Consecutive Lower Closes" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Microsoft. Out of 134 times, MSFT closed higher 58.21% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 64.93% with an average market move of 1.17%.