Microsoft Charges Higher On London Stock Exchange Group Deal: Will This New Trend Form?

Microsoft Corporation MSFT spiked up almost 3% at one point on Monday before running into a group of sellers who knocked the stock down about 1% from the high-of-day.

Microsoft announced Sunday it had agreed to buy about a 4% equity stake in London Stock Exchange Group plc LNSTY through certain investment funds affiliated with a consortium comprising BlackRock Inc. and Thomson Reuters. If the deal receives customary antitrust and regulatory approvals, Microsoft expects it to close during the first quarter of next year.

The tech giant and LSE also entered a new 10-year strategic partnership to build the latter’s data infrastructure using Microsoft Cloud.

The news caused Microsoft to open higher on Monday, breaking up from a falling channel pattern, which the stock attempted to do on Friday but failed.

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The Microsoft Chart: Microsoft started to fall into a descending channel pattern on Dec. 2, after topping out at the $256.12 mark the day prior. On Friday, the stock attempted to break up from the pattern, to form a possible reversal into an uptrend, but rejected and wicked from the $250 area, which dropped Microsoft back down into the channel.

• Monday’s spike higher caused Microsoft to negate its downtrend within the channel, by forming a higher high above the most recent lower high of $248.74, which was printed on Dec. 8. If the stock is going to confirm a new uptrend, it will eventually need to retrace to create a higher low above $242.21.
• If Microsoft closes the trading session with a long upper wick, the stock will print a shooting star candlestick, which could indicate the temporary top is in and Microsoft will trade lower on Tuesday. If buyers come in and cause Microsoft to close the trading day near its high-of-day price, the stock will print a bullish Marubozu candlestick, which could indicate higher prices are on the horizon.
• Microsoft has resistance above at $256.84 and $263.19 and support below at $249 and $243.

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