Microsoft (MSFT Stock) bullish uptrend expecting small dip to 38.2% Fibonacci


  • Microsoft stock (MSFT) remains in a solid uptrend. Recently, a strong bullish breakout occurred after a sideways, consolidation zone. 

  • On the 4 hour chart, a small double top is indicating the difficulty for price action to break into higher ground. Some type of retracement or consolidation is expected

  • This bullish breakout was expected in our previous wave analysis from September. This is also indicating the potential for more upside in 2021.

Chart

Price Charts and Technical Analysis

The MSFT stock seems to have completed an ABC (pink) pattern in wave 4 (purple) after a strong push up in wave 3 (purple). It was followed by a push up (wave 1 pink) and an ABC (grey) retracement in wave 2 (pink).

Let’s review the current situation:

  1. The current breakout is likely a wave 3 (grey). 

  2. The failure for price to confirm a new higher high in recent days could be the end of the wave 3 and the start of a shallow wave 4 (grey) pullback.

  3. The usual retracements for waves 4 are shallow. 

  4. WIth MSFT, the natural support zone (blue box) seems to be located at the previous resistance and the 21 ema support zone. 

  5. The support zone is expected to create a bullish bounce (green arrow).

  6. Any deeper pullback places the uptrend in waiting mode (yellow pause button) or invalidates the current wave outlook (red stop button).

On the 4 hour chart, a small double top is indicating the difficulty for price action to break into higher ground. Some type of retracement or consolidation is expected:

  • A bearish pullback (orange arrows) should take price back to support (blue box) and the Fibonacci retracement levels of wave 4 (grey).

  • Price action could also build a shallow and sideways ABCDE triangle pattern (grey arrows).

Eventually a bullish bounce (green arrows) or breakout (blue arrow) is expected to take price action to higher levels again as long as price stays above the 61.8% Fib and especially the support trend line (green). Main targets are $250, $260, and $275.

Chart


The analysis has been done with the ecs.SWAT method and ebook.

Elite CurrenSea Training Program(s) should not be treated as a recommendation or a suggestion to buy or sell any security or the suitability of any investment strategy for Student. The purchase, sale, or advice regarding any security, other financial instrument or system can only be performed by a licensed Industry representative; such as, but not limited to a Broker/Dealer, Introducing Broker, FCM and/or Registered Investment Advisor. Neither Elite CurrenSea nor its representatives are licensed to make such advisements. Electronic active trading (trading) may put your capital at risk, hence all trading decisions are made at your own risk. Furthermore, trading may also involve a high volume & frequency of trading activity. Each trade generates a commission and the total daily commission on such a high volume of trading can be considerable. Trading accounts should be considered speculative in nature with the objective being to generate short-term profits. This activity may result in the loss of more than 100% of an investment, which is the sole responsibility of the client. Any trader should realise the operation of a margin account under various market conditions and review his or her investment objectives, financial resources and risk tolerances to determine whether margin trading is appropriate for them. The increased leverage which margin provides may heighten risk substantially, including the risk of loss in excess of 100% of an investment.

Feed news

Get Weekly Crypto trade ideas!  
Empower yourself with the best market insights

Join FXStreet Premium!    

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD retreats below 1.2000 on US dollar bounce, German CPI in focus

EUR/USD snaps three-day uptrend while stepping back from one-month tops of 1.1990. US dollar bounce and market consolidation trigger pullback moves. Vaccine jitters, US-Russian conflict battle stimulus hopes to challenge risk-on mood. German CPI can recall the bulls.

EUR/USD News

GBP/USD rises toward 1.38 ahead of US data, Brexit meeting

GBP/USD is edging up toward 1.38, reversing its previous falls in tense trading ahead of all-important US retail sales. A Brexit-related meeting on Northern Ireland is also eyed. 

GBP/USD News

Bitcoin on-chain data shows BTC is reaching “peak hype”

Bitcoin’s on-chain data suggest a short-term correction may be needed before Bitcoin could continue its price rally. Market sentiment toward Bitcoin poses a major concern for the cryptocurrency, indicating it is approaching “peak hype.”

Read more

XAU/USD looks to retest $1750 as USD bounce fizzles ahead of US Retail Sales

Gold is breaking higher as the US dollar rebound loses steam. The US Treasury yields retreat ahead of the Retail Sales release. XAU/USD is teasing symmetrical triangle breakout on the 1H chart.

Gold News

Coinbase (COIN) closes down 14% from the $381 opening price, what next?

After a dream debut for the cryptocurrency exchange Coinbase Global Inc. (COIN) on Nasdaq at $381, the shares rallied as high as $429.54. Although the upswing failed to sustain, as Bitcoin fell from record highs and tech stocks tumbled across the board. 

Read more

Forex MAJORS

Cryptocurrencies

Signatures