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Microsoft Corporation (NASDAQ:MSFT) opened slightly higher Tuesday as traders and investors prepare for the kickoff into big tech earnings, starting with Netflix, which will report its first quarter results after the market close.
At the high-of-day, Microsoft ran into a group of sellers who knocked the stock down under Monday’s closing price. The move came in tandem with the S&P 500, which was edging lower after opening the trading day positive.
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From a technical analysis perspective, Microsoft formed a bearish triple top pattern near the $292 level, which has negated the stock’s uptrend for the time being.
A double top pattern is a reversal indicator that shows a stock has reached a key resistance level, retraced, back tested the level as resistance and is likely to drop again. It is possible the stock may retest the level as resistance again, creating a triple or even quadruple top pattern.
The formation is always identified after a security has risen in price and is at the top of an uptrend, whereas a bullish double bottom pattern is always found in a downtrend. A spike in volume confirms the double top pattern was recognized and subsequent increasing volume may indicate the stock will reverse into a downtrend.
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The Microsoft Chart: Microsoft opened on top of the upper resistance, but the bulls were too weak to break the stock above the double top pattern, which was created on April 6 and Monday, creating a triple top formation. The pattern caused Microsoft to fall on increasing volume on lower time frames, indicating the formation was recognized.
- When Microsoft edged lower, the stock was attempting to hold support at the eight-day exponential moving average (EMA). Bullish traders want to see that indicator hold as support because the eight-day EMA has been guiding Microsoft higher since March 15.
- If Microsoft can break up above $292 over the coming days, there’s an upper gap between $292 and $296 that is likely to fill. If that occurs, bearish traders can watch to see if the stock rejects at the upper range of the gap and prints a bearish reversal candlestick at that level.
- Microsoft has resistance above at $289.69 and $294.23 and support below at $283.11 and $276.90.
Photo via Pixabay.
Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.