Microsoft Corp. (MSFT) shares are lower in early Thursday trading as investors react to the tech giant cautioning that at least one portion of its business (PC/Windows) won't meet current quarter revenue forecasts. Let's check out the charts and indicators to get a sense of the downside risk.
In the daily bar chart of Action Alerts PLUS holding MSFT, below, we can see that the prices were already testing the rising 50-day moving average line. We are likely to see prices gap below this indicator. The 200-day moving average line is rising and intersects in the $145 area and I would not rule out a test of this indicator in the days/weeks ahead.
Trading volume has been very heavy this month and suggests that we may have seen a shift in ownership from strong hands to weak hands. The daily On-Balance-Volume (OBV) line shows a small turn to the downside telling us that sellers have become more aggressive. I would anticipate that the OBV line continues lower.
The Moving Average Convergence Divergence (MACD) oscillator has already crossed to the downside for a take profits sell signal.