Stock of the day: Microsoft

Market bounced again and it seems that the bearish correction has ended. In many places, it did not happen in a random place but in a very precise technical location. One of those instruments used widely is the famous Microsoft. The price of the stock had been falling since the end of December but that stopped three days ago.

Initial drop was looking a little bit dangerous as the price created a triple top formation and broke its neckline (black). Sellers did not have much space to develop the downswing as below, we already had two important supports, ready to defend the mood of the shareholders. First was the horizontal one on the 305 USD and the second one was dynamic up trendline(green), which happened to cross the chart, around this level too. As it often happens, when the dynamic and horizontal support align, their strength multiplies and we should always consider those supports as reliable ones.

As you see on the chart, support worked and the price bounced off it aiming higher. We even managed to come back above the neckline of the triple top formation, which actually negates it. Sentiment is back to positive, at least as long as we stay above the orange area.