Although MSFT has been treading water for months, the stock remains a crucial bellwether because of the company’s enormous global footprint and the singular robustness of its revenue model, presumably even in hard times. Get Microsoft right, and your market forecast cannot go far awry. That’s why we’ll pay particular attention to small details — at the moment, the stock’s ability to convert into theoretical profit the ‘mechanical’ buy signal that triggered on Friday with the descent to the green line (x=413.45). This textbook set-up should produce a pop not merely to p=421.04, but to d=436.20. Any less would hint that all is not well and the stock is in distribution rather than consolidating for a shot at new record highs above July’s 468 peak. A failure to achieve this was implied in my forecast back in August, when I began drum-rolling a target at 449.42 that would have left MSFT well shy of a new record. It topped at 441.85 and has been unable to improve on that since. We’re about to see whether this failure portends deeper troubles for MSFT and for the bull market itself.
MSFT – Microsoft (Last:415.00)
