Stock of the day: Microsoft

We continue searching for the best trading occasion on global stocks. Today, we’re going to switch our attention across the great ocean and analyze Microsoft. No introduction needed. Jest let me tell you now that on MSFT, we’re one step away from a major sell signal.

The reason to be pessimistic is the giant head and shoulders pattern (yellow), which is looming over the chart. The pattern is complete as yesterday we managed to finish the right shoulder, which is now peacefully resting on the neckline (red). This neckline is crucial here as it is “to be or not to be” a buy signal.

How does one usually trade this kind of setup? The price defending and bouncing off the neckline, would keep the bullish sentiment alive. On the other hand, the price breaking the neckline and closing the day below the red line, would bring us a legitimate, long-term sell signal. Now you can see that we are in an absolutely crucial place. The next few sessions, should give us an answer about the near future of Microsoft.