Don't Be in a Rush to Buy Microsoft Stock

Let's see how things play out.

Microsoft Corp (MSFT) has been retreating from a higher opening. This pullback is looking like a top reversal pattern on the Japanese candlestick chart. Let's check.

In this daily Japanese candlestick chart of MSFT, below, the most recent candle pattern is likely to be a gravestone doji by the close of business Friday. Things could change but the market action so far today shows that traders rejected the highs. Prices are trading above the rising 50-day moving average line and above the bottoming 200-day line.

The trading volume is not super strong and the On-Balance-Volume (OBV) line has not broken above its February high even though prices have broken above the February peak. The MACD oscillator is bullish. 

 

In this weekly Japanese candlestick chart of MSFT, below, I see a mixed picture. Of note is the fact that the MACD oscillator is still below the zero line. 

 

 

In this daily Point and Figure chart of MSFT, below, I can see a recent new high and a $351 price target. I also see some chart resistance up to $292.

 

 

Bottom line strategy: In case you were wondering, a gravestone doji is bearish... what else could it be? Let's watch and let things "settle out" a bit.

(Microsoft is a holding in the Action Alerts PLUS member club. Want to be alerted before AAP buys or sells MSFT? Learn more now.)

Employees of TheStreet are prohibited from trading individual securities.