Mister Softy is a powerhouse. The FAANG's (FB, AAPL, AMZN, NFLX, GOOGL) receive the attention but MSFT should be included as well. Microsoft is the tech powerhouse with price a moonshot over the last decade as the Federal Reserve and other global central bankers pump, pump, pump. Comically, the chart looks like a commodity chart. This stuff always ends in tears.
The MSFT monthly chart is very similar to AAPL's chart that was posted a couple days ago. Today is the EOM, EOQ2 and EOH1 so the monthly charts receive the print for June, that is cast in stone, and the July candlestick begins tomorrow. The chart is amazing. 20 bucks in 2011 gets you 2 hundo, a 10-bagger, in 2020, only 8 or 9 years later. The wealthy, that own large stock portfolios, dance with glee laughing at the stupid huddled masses that do not own a single share of stock (one half of America).
Like all other stocks and the indexes, 2020 is shaping up to be an epic and historic top. The indexes are driven higher by the blue chip tech stocks. Microsoft and Apple will likely be the last two major stocks to roll over. As the previous Apple technical analysis shows, AAPL is on pace for a significant long-term top to occur anytime say over the next 6 weeks. MSFT is in the same boat. These two stocks have serious momentum and institutional support so they do not want to go down without a fight. The technicals, however, suggest it is time to prepare for the upcoming funeral. Black masks will be distributed.
Time for some mumbo-jumbo. Remember, this is a monthly chart so the coming rollover is a serious matter where price may not see these levels again for many months if not a few years. But Mister Softy is not ready for the morgue yet. If you enjoyed the big multi-year rally, however, now is the time to execute your exit plan. Price is at overbot levels or coming off overbot levels for the RSI, stochastics and money flow, agreeable to a pullback. The rising wedge is ominous since the collapses from rising wedges can be quite dramatic.
The chart indicators (red lines) are in universal negative divergence except for the MACD line that remains long and strong (sloping higher); ditto the histo. Thus, price wants to drop in this monthly time frame going forward right now due to the above reasons and neggie d, however, MSFT will want to come back up again in this monthly time frame to satisfy the MACD that still has fuel in the tank to pump price. So a jog move is likely, down in July then back up in August for a matching or higher price high, and the MACD goes neggie d, sealing the fate of Microsoft and calling the long-term top. From there, it would be multi-month sideways to sideways lower price action.
As mentioned in the Apple post, since tomorrow is July, something very special may occur. If the bulls can keep the stock market steady today, tomorrow, July, will begin at a matching or higher price high (for AAPL and MSFT), which opens the door to the significant top occurring right away. Watch these monthly charts closely because if price prints a matching high in July (Thursday or Friday), and you see that MACD line flat line, its over now. That would be neggie d and all indicators would be on board for the smack down to begin. At any rate, like Apple, Mister Softy will top out anytime over the next few weeks and then a multi-month down move begins.
Isn't it interesting that we are at the tip-top in the stock market right now, with a long-term multi-month and multi-year down move beginning any day ahead. No one sees it coming.
The ADX remains elevated so the beloved MSFT stock remains well bid and in a strong uptrend. The ADX, however, is a hair weaker from peak to peak and on this lustful high print, the ADX sneaks a hair lower. This is the only indicator on the chart (besides the MACD and histo discussed above) that is bull-friendly. The pink box shows the ADX calling out a strong upside trend in MSFT since early 2014.
The Aroon is at maximum euphoric off-the-charts bullishness for Microsoft. Investors and traders are enjoying an orgy so bullishly obscene that it would make Caligula blush. Stockholders attending the soiree and witnessing the bullish action first hand wonder why they call such a strong performer Mister Softy. The universal consensus for MSFT is completely 100% bullish and buy, buy, buy! What does that tell you? It is reminiscent of the frenzy during the dot-com bubble.
The Aroon green line is pegged at one hundo with nowhere to go but down while the red line is crushed to zero with nowhere to go but up both indicators are bearish. As seen the last few years, however, price can keep heading higher. But looking closer you can see that every time the Aroon indicators are pegged they come off those levels which equates to MSFT selling off.
February and March is strong trading volume while the last three months the volume is not overly impressive, it is just enough to show that inexperienced novice traders are jumping on the Microsoft bandwagon, bragging that they are Jesse Livermore, bidding the price higher on hype. MSFT has violated the upper standard deviation band so the middle band at 141, and rising, is on the table as well as the lower band at 87. Price is extended above the moving averages requiring a mean reversion lower which piles on more bearish stuff.
It would not be surprising to see MSFT in the 150-170 range over the next couple months or so, then at 120-150 at year end and moving to 80-120 in 2021. This will be a surprise to everyone especially the bagholding retail sucka's that are buying MSFT and AAPL now.
MSFT is up +0.3% in early trading to 199 pushing for 2 hundo. Keystone's 80/20 Rurle says 8's lead to 2's so the breach of 180 opens that door to 220 so that may be its swan song high anywhere between 199 and 230.
Keystone does not hold a position long or short MSFT or AAPL right now. Only the short side would be considered but as mentioned, you have to be very leery of shorting a stock with momentum and strong institutional support. The shorter term charts are critical for timing a short entry (hourly charts). As this summer plays out, people will realize that we have "been to the mountain top." This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.
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