October 21, 2012

  • First chart shows price contraction in weekly chart.
  • Strong up move possible on closing above 10.66 and 200 Day SMA.
  • Bears will be stronger below 9.71 and 50 Day SMA.

  • Microsoft Weekly charts near crucial support levels. Price near 100 Week SMA and the support zone between 28.15 - 28.32.
  • Weekly stochastic lines yet to reach oversold levels, If the previous low is not held price may slide further.
  • For bulls the positive divergence in MACD Histogram has to work for a possible bounce. If the weekly support zone is not held this setup will not work.

  • 2nd Char the weekly time frame shows a MACD sell signal. 
  • If the weekly up trend line and 200 SMA does not hold the Weekly MACD sell signal will be effective and price may fall towards the support zone between 59 - 60 as shown shown in the second chart.
  • Bulls must hope that price does not breach the support area and 200 SMA near 64.90 on closing basis.

  • Daily chart shows crucial support levels at 50 Day SMA and 166.23. For extending the down move these two levels must break on closing basis.
  • Weekly chart shows the broad range between 148 - 174. Price moving down from the top of the range. For a bigger fall the rising red colored support line must break which should also lead to a stochastic sell signal. Price not breaking below the red support line should give another up move.


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"All through time, people have basically acted and reacted the same way in the market as a result of: greed, fear, ignorance, and hope. That is why the numerical formations and patterns recur on a constant basis."
—Jesse Livermore