MSFT pushes through Thursday's high
Microsoft Corporation (MSFT) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
MSFT finished the month 0.74% higher at 205.01 after gaining $1.11 (0.54%) today on high volume, notably underperforming the Nasdaq 100 (1.78%). Trading up to $5.39 lower after the open, the stock managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on July 24th, MSFT gained 1.27% on the following trading day. Closing above Thursday's high at 204.46, the market confirmed its breakout through the prior session high after trading up to $0.64 above it intraday.
Daily Candlestick Chart (MSFT as at Jul 31, 2020):
Friday's trading range has been $6.09 (2.98%), that's slightly above the last trading month's daily average range of $5.23. Things look different on the weekly timeframe, where the market's trading range of the last week has been way below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for MSFT.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bullish Outside Bar.
After trading down to 199.01 earlier during the day, Microsoft bounced off the key technical support level at 202.03 (S1). The failure to close below the support could increase that levels importance as support going forward. The share was sold again around 205.10 after having seen highs at 204.46, 204.65 and 204.70 in the last three trading sessions. Obviously there is something going on at that level.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to previous three Highs" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Microsoft. Out of 26 times, MSFT closed higher 57.69% 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 73.08% with an average market move of 2.69%.