In the most recent Dow 30 weekly report, Eagle Bay Capital Founder and Market Technician JC Parets takes a look into Microsoft Corporation MSFT and a weekly chart every shareholder should see.
According to Parets and his team, Microsoft had been “one of the strongest charts in the Dow. As it kept making new highs, momentum still in a bullish range and relative strength confirming the highs by making new highs of its own this had been great.”
Related Link: How Low Will Microsoft's Numbers Go?
However, he adds, “now relative strength broke down” and the firm has said that “below the uptrend line from 2013 lows and more neutral stance is best.”
Parets concludes, “There is no reason to be long structurally below this broken uptrend line and would still look to the daily timeframe for a more tactical approach.”
Looking at the chart for Friday, “short-term we broke the uptrend line from 2014 and highs from September.”
“Momentum also confirmed a bearish divergence in Q4 and hit oversold conditions on this decline confirming a bearish range. A neutral stance is still appropriate until we got more information, particularly with a flat 200-day moving average,” Parets said.
"Looking to fade strength, especially towards 44.50-45. This was hit in late February and would do the same on any activity back up there.”
Shares of Microsoft were up more than 3.5 percent on Monday.
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