Microsoft

I've left plenty of room for another big leg down, but also for a test of a promising midpoint Hidden Pivot support slightly below, at 378.18. It cannot but reveal how much more selling remains to be done in a bear market that has already seen MSFT's value fall by 31% from the record 555 achieved last July.  If the stock continues to fall to the 333.67 target, that would equate to a 40%  drop from the top. There is an additional number worthy of our attention: 355.16. That is the 'D' target of a smaller pattern capable of producing a lasting bottom, and it should be used as a minimum downside projection for the near term.

I've restored MSFT to the list because it could prove to be analytically useful. No bear market is possible as long as this stock is at least holding its own.  It triggered a plain-jane 'mechanical' buy when it fell to the green line last month (x=407.04) after having failed to achieve a bull-market target at D=593.79 by a country mile. The implication is that you are likely to make money buying the stock here with a stop-loss just beneath the point C low at 345.79.  I cannot guarantee that the implied rally will reach D, but it is a better bet to deliver a one-level move to p than to slip beneath C first.

Bottom-fishing at the 257.71 target of this pattern looks so promising that I hate to queer its magic with this semi-public ad.  The target looks likely to be reached because the stock never poked above p=266.91 after first penetrating it on the way down. Still, the failure to bounce precisely from the secondary Hidden Pivot (p2=262.31) is more than a little mystifying, since it is highly unlikely the support was front-run. (I've masked two coordinates for proprietary reasons).  I would call this a back-up-the-truck trade if the target had been disseminated and triggered intraday. As things stand, however, you'll need to use small-pattern 'camo' to get aboard with risk held to a practical minimum. _______ UPDATE (Mar 5):  Sunday's rickisms in this space set a new world record for the number of forehead-slapping errors your editor has committed in a single tout. The 257.71 target boldfaced in the original tout, above, did indeed nail a tradeable low with the eye-popping precision you have come to expect from Rick's Picks. The trouble is, I used MSFT in the header, but the tout pertained to AAPL. Now here's where the rickisms grew so thick that some of you may have feared your editor had imbibed a bad dose of LSD; for in fact, the chart included with the tout showed neither Microsoft nor AAPL, but April Gold.  Fortunately, or perhaps not, there seems to be only one subscriber who remotely cares about Microsoft, and it is was hhis comment in the chat room about my "janky" tout that prompted this update. To make amends, I've replaced the gold chart with one of MSFT so that  you can see that things worked out almost precisely according to the forecast.  Because the alert subscriber is one of the most experienced traders who frequents the

A further fall to the 404.67 target would represent at 27% decline since the stock sputtered out in October at 553.72, just an inch shy of new record highs. The pattern doesn't quite qualify as an ominous, island-reversal top, but it doesn't take a chartist to feel the weight of the dome the stock has traced out over the last nine months.  The pattern is simple and obvious, but sufficiently compelling for us to infer that MSFT is far more likely to hit D before C=493.50, if it ever does.  This is the fourth most valuable company in the world, behind Nvidia, Google, and Apple, implying that the stock's decline has deflated the global 'wealth effect' by a large amount.  See this week's commentary (above) for a further discussion of this. _______ UPDATE (Feb 8): The stock has looked so awful that I am substituting AAPL on the 'touts' list.  The chart shows a logical path down to D=376.88. The stock can be 'mechanically' shorted at the red line (p=408.24), stop 418.70.  ________ UPDATE (Feb 14):  We usually do 'mechanical' shorts at the green line, but I made a rare exception this time, recommending that you get short at the red line (p=480.24) with a 418.70 stop-loss. The trade would have produced a loss of $1024 per round lot. Had we shorted at the green line (x=423.92)  as is customary, the trade would have worked out nicely, since the stock made a top at  423.68 just ahead of a so-far plunge of $22.67.  The 376.99 downside target remains valid in any case and should be used as a minimum objective for now.

DaBoyz took advantage of bearish expectations that had been intensifying since the stock began its long dirge in the final days of October.  The rabid short-squeeze pushed MSFT to the top of the list of Friday's percentage gainers. It also slightly pierced a midpoint Hidden Pivot resistance at 469.36 that is associated with a 'D' target at 500.03. Penetration was not sufficient to clinch more upside to the target, nor to guarantee the profitability of a 'mechanical' buy at the green line. (As things stand, it would rate a still-enticing '7.3'.)  A bullish trading bias is warranted now, as is the expectation that this behemoth's continuing ascent will add buoyancy to the broad averages and the lunatic sector (aka 'Magnificent Seven').

The stock spent most of the week lollygagging near the 457.04 'secondary Hidden Pivot' of the bearish pattern shown.  Its eventual  target is 444.89, a $15 fall from here. However, the breach of p was such a laborious affair that I cannot guarantee that it will be achieved.  But if p2 is decisively exceeded to the downside, or if the stock closes for two consecutive days beneath it, odds of further fall to 444.89 would shorten significantly. For now, 444.89 should be viewed as a worst-case low for the near term. It is also a back-up-the-truck number for bottom-fishing, since even with the somewhat obvious pattern, D=444.89 cannot possibly give way without a struggle. ________ UPDATE (Jan 21, 5:57 p.m.): After the stock MSFT has put in a tradable bottom at or very near 431.89, the rally along a big-picture C-D leg would have the potential to reach 593.79. Seems farfetched, I know, but the stock will face a test we can rely on near 469.29, a major midpoint Hidden Pivot that coincides with the 2024 top. Neither of those Hidden Pivots exists yet, and their exact, respective locations will depend on where the actual low occurs. Please note that the time stamp for this post, along with the last price, come from my update in the chat room yesterday. 

Microsoft has been screwing the pooch for nearly five weeks, but Friday's close made the hourly chart look a little more menacing. There was a very slight, gratuitous breach of a mid-December low that had marked the bottom of MSFT's tedious range, and we might have expected the snap-back rally to have achieved more loft with fewer bulls on board to weigh it down. If they don't come galloping back in soon, though, look for more sinkage to at least 460.58, the pattern's seoncdary Hidden Pivot.  Worst case for the next 10-12 days is 448.77, the 'D' target.

Although the trend has been bearish since the stock at peaked at 555.45 in July, bears have struggled lately to achieve the implied correction target at 444.95.  Most immediately, I expect the stock to run up to the 496.09 target of a minor pattern. If it takes out the pattern's 'C' low at 482.09 (12/19) first, however, I'd consider the possibility that stocks are in a bear market more seriously. Because of its solid revenue stream and its pre-eminence in the lunatic sector (aka the Magnificent Seven), Microsoft remains my #1 bellwether for the 16-year-old bull market.

Microsoft spent the last two days of the week churning a weak 'mechanical' buy signal. It is considered weak because the pullback to the green line where we typically do our buying followed a high along c-d that barely reached the midpoint Hidden Pivot, let alone the 'sweet spot' midway between p and p2.  How the stock treats the signal has consequences for the broad averages, since the company trades with a value of around $3.6 trillion. If MSFT dips below c=464.89 without punching through p, that would add to the evidence that stocks are in a bear market. _______ UPDATE (December 14): Traders and the, um, 'investment community' spent the week screwing the pooch, so nothing has changed in the analysis above. _______ UPDATE (Dec 20): Another week of merciless pooch-screwing left MSFT undeserving of our attention.  There is little to see or predict here, folks, so let's move along to the next exhibit