Quick Take Technical Analysis: Microsoft Corp

On Wednesday, Microsoft Corp MSFT soared to a new all-time high of $326.10 following its first-quarter earnings print after the market closed the day prior. On Thursday, Microsoft was digesting the news with consolidation in the form of a bullish inside bar pattern.

• The inside bar is bullish because Microsoft was trading higher prior to the pattern being made.
• On Thursday, Microsoft was in the process of printing a hammer candlestick on the daily chart, which is bullish because it indicates when Microsoft’s stock dropped below the $323.50 mark bulls bought the dip.
• If Microsoft breaks up from the inside bar pattern to a new all-time high bulls will want to watch for large volume candles on lower timeframes to judge whether there will be bullish follow-through into a blue sky run.
• Traders already in a position can watch the eight-day exponential moving average (EMA) on the hourly chart as a guide. If Microsoft falls below the eight-day EMA and doesn’t immediately recover, lower prices could come.
• There is a gap below that may give some bullish traders pause because it is likely Microsoft will fill the gap at some point in the future.