Microsoft Corp (MSFT) is on my stock alert watch list. The reason is simple. Yesterday, Microsoft staged a strong reversal off all-time highs on heavy volume. To explain this, simply look at the chart from February 5th, 2020. Microsoft opened sharply higher, at all-time highs. The stock then fell, closing negative on the day. The heavy volume alerts investors and stock traders that big money was dumping on the gap higher. Today, the stock is higher, but not at or above the all-time high made yesterday prior to the reversal. On a purely technical basis, the all-time high of $184.20 made yesterday becomes the line in the sand. As long as that high is not violated with a daily close above, a possible top is in.
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To confirm the top and look for significant downside, watch for a daily close below yesterday’s low pivot of $178.39. In other words, any daily close above yesterday’s high signals further upside while any daily close below yesterday’s low signals significant downside. Microsoft being on the stock alert watch list of mine is purely because of the reversal day yesterday and the heavy volume it came with. This is significant, now let’s watch and see what the next move is….