Here’s what I think about Microsoft ($MSFT) – March 6, 2024
This is Dan Fitzpatrick with your Chart of the Day. I know it’s not cute, I know it’s not sexy, but it is Microsoft ( NASDAQ: MSFT ), and I think we’re at a place where it’s buyable again.
You can see what’s been going on here for years, it’s been in a nice steady uptrend. Right now it’s giving us a nice very deep cup and handle pattern that spans a couple of years. Seriously, almost 40 percent on the pullback, that’s a steep pullback but it’s not really beyond the parameters that Bill O’Neil describes when he is talking about cup and handles, so I like it in that regard.
One other thing to mention in this is, there is such a thing as fractals. What fractals are, are patterns within patterns. I’m showing you this big cup and handle continuation pattern. If you just want to look at what is really the handle here, it’s actually a cup and handle in and of itself.
You are getting this kind of move sideways, this was a big oops real fast, but I look at this as the left side of the move, and then the downside here is 15, 16 percent. So this was not much of a pullback, obviously in a compressed amount of time. But this was a little pullback, and then it comes back up and breaks through after forming the right side.
And then what do we get here? We get another little handle here, this is a really powerful pattern in that way. This is why I’m mentioning it to you now. You can see here that the time to be buying this stock has been on these pullbacks, no time in here. You could say, Oh, it’s back to the 20-day moving average. All right, well great. Now it’s back to the lower Bollinger Band and at the 50-day moving average, and so to me, that’s better.
This would be my suggestion as far as buying this if you want to buy Microsoft ( NASDAQ: MSFT ), that’s the first threshold. I can’t buy it for you. I don’t get to make money on your trade if you buy it, just like I don’t have to lose money on your trade if you buy it and the stock tanks.
What I’m saying is, this is a good entry if you are looking to buy the stock. Because it’s very, very close to this 50-day moving average, which has been really, really solid support here on a couple of occasions.
My suggestion would be, wherever it opens up tomorrow, only the stock knows. But if it is trading above where it opens tomorrow morning and you are looking for an entry, that’s your entry. Then you would just keep your stop a little bit below the 50-day moving average or below the intraday low, now you’ve got a low-risk entry on a high-quality stock.
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