Don’t step in front of this. (June 21, 2012)

by DAN MSFT SP-500 
I’m Dan Fitzpatrick at StockMarketMentor.com on Thursday, June 21st. On a pretty ugly day for the market. Goldman Sachs comes out and says, “Short the S&P”, and guess what? Everybody came out and shorted the S&P. I’m looking at Microsoft ( $MSFT ) and this thing got a really nice pop on its new surface and their operating system and all that jazz, but that thing is over. Short term. Support here about $28.60 or so, something like that. Down here, okay, $28.50. This area right here is where support is. If you bought Microsoft ( $MSFT ) on this pop, that pop has popped. Now the stock is coming back to consolidate. As long as the S&P and the Dow are weak, you know you’re going to see that reflected in Microsoft as well. Also if you’re really bullish on Microsoft ( $MSFT ) and I know a lot of people are because you think their new Windows is just so awesome and that’s great. I use it to, but just look at the way this thing is trading. Up and down, we’ve still got a series of lower highs, lower lows, more volatile in here that’s for sure. But right now you’ve got resistance in about $31.00, the stock’s at $30.00. Why do you want to be long when the stock has more downside? It doesn’t have a whole lot of upside, because everybody who bought today, for the most part, is pretty much losing money. In this kind of market I think a lot of folks are going to the sidelines. I think you’re going to see more downside in Microsoft ( $MSFT ). Enough downside to short it, maybe, but I just have a hard time shorting a stock that’s down to over 2.5 percent in one day, because it’s just kind of ripe for a little bit of a snap back rally. However, if the stock does come up, around here, and start to roll over, I would have no problem shorting it. Bottom line is this, I would expect to move back down here. I just don’t necessarily expect that from this level straight down. Probably going to get a little wiggle, jiggle in here, but ultimately this is a stock that you only want to consider buying below $30.00. Okay, members get over to the Strategy Session. I’ve got a lot to say about this market and what our opportunities are.

Free Chart