MSFT Microsoft Weekly Chart; Double-Top (M-Top); Overbot; Negative Divergence; Loss of Trend; Aroon Negative Cross

Mr Softy is about to go limp. MSFT is a stalwart outperformer the last few years pumping the stock market higher, especially the Nazzy indexes. A lot is said about the FAANG stocks (FB, AAPL, AMZN, NFLX, GOOGL) but you must add Microsoft to that list. However, price comes up for the double-top, or M-Top, with the chart indicators in universal negative divergence. It's over in the weekly time frame.

The stochastics are overbot agreeable to a selloff ahead. Price is extended above it moving averages requiring a mean reversion like earlier this year. Interestingly, price is not at the upper standard deviation so if you are a MSFT bull, there is a tiny sliver of hope for you to hold on to (price may float a bit higher if there is happy talk about Microsoft or the economy or more central banker money-printing).

A back kiss of the 20-day MA at 170 and 50-day MA at 154 are on the table. The 150-day MA sloping higher proving that the ticker is in a cyclical bull pattern. The ADX is down at 25. Note that for the rally earlier this year, the ADX was ramping higher and above 40. For this rally it should be the same, but it is not. The ADX is actually moving lower proving that the rally is NOT a strong uptrend. The Aroon negative cross occurs making for happy bears but the bulls are hoping for a repeat of 2019 when a positive reversal occurred and it was off the races. You can see that the chart is in far different shape now. 

Simply short MSFT from here forward for next few weeks with confidence. The hourly charts hint at a rolling top rolling over. The MSFT monthly chart is also in neggie d except for the MACD which you need to watch closely. The MACD remains long and strong hinting that after a multi-week selloff, Microsoft will want to come back up again to the current highs, on the monthly basis. However, this is not cast in stone. Once the selling begins in earnest, the MACD on the monthly chart will likely bend lower and by the time June ends, it may display neggie d. What does all this mumbo-jumbo mean? It means that there is a very high probability that these current highs in Mr Softy, that match the highs from February, may be the long-term highs for the ticker and not seen again for months and years. Plan accordingly if you are long MSFT and enjoyed the big ride up, and then endured the last few months of turmoil and pain. If so, "Sell Mortimer, sell." Keystone does not have a position in MSFT right now but will short it going forward. 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.