Momentum Divergences for MSFT

MSFT-- will release earnings after the close, with the stock perched right near its all-time high of 97.21 (3/12/18).

All of the action since the Feb. low at 83.83 could be viewed as a high level bullish digestion period ahead of upside continuation that projects to a new high at 102-105.

What is so concerning from a technical perspective, is the glaring momentum divergences since the lower high hit on 2/01/18 at 96.07. On a weekly chart basis, which carries considerably more weight than a daily chart basis, the momentum divergences represent a major warning signal that an upside breakout from the digestion period should be viewed with suspicion as to its sustainability.

In fact, my sense is that this MSFT set up is ripe for a "sell-the-news" reaction to strong earnings.

4 26 18 Weekly MSFT GIF
4 26 18 Weekly MSFT GIF
  • Action-Oriented Trade Set-Ups in Stocks & ETFs
  • Macro Analysis of the Broader Markets
  • Detailed Technical Guidance for each Trading Idea
  • Live Interaction w/ Mike & Our Member Community
  • And Much, Much More!
Join Now! - Special Offer!
Veteran Wall Street analyst and financial author, Mike provides detailed and timely analysis and trade set-ups on a range of markets. Read more...

Have Mike's “Out Front” morning analysis delivered FREE to your email inbox twice weekly!