The daily chart yields a much clearer picture than the 30-minute displayed here last week. It yields a 420.18 ‘d’ target that can be used to bottom-fish the now three-week selloff with risk very tightly controlled. The downtrend did not demolish the midpoint Hidden Pivot support (p=438.17) on the way down, and that makes more weakness to d less than ironclad. However, it looks likely, and the gnarliness of the pattern suggests the turn from 420.18 would be sufficiently precise to allow for the tightest imaginable stop-loss. Please note that if MSFT is in a downtrend that has further to go, all U.S. stocks will be under similar pressure. _______ UPDATE (Jan 3, 10:56 a.m. EST): The trade was an easy winner using a reverse-pattern (rABC) to trigger, since the stock caught a nearly $6 bounce from 420.66. It eventually went lower, however, and is in the throes of a short-squeeze bounce off yesterday’s bombed-out low at 414.85. Despite the ferocity of today’s rally, I now expect the stock to fall to at least 409.05, and thence to 393.35. Plan on getting short with a tight stop if the bounce hits 430.07.
MSFT – Microsoft (Last:421.05)
