Microsoft Shares (MSFT) Goes Into Selling Climax
MSFT $28.74, -2.44%
What a surprise with MSFT last Friday. :) It was a nasty but interesting surprise.
All over the news wires, analysts are attributing the 2.44% drop to nasty Vista comments. But, is this the first time we are hearing nasty comments about VISTA?? Vista has been the center of controversy, nasty comments, hacks and security problems since the very first day... did all these comments finally accumulate into a 2.44% dropp on Friday? I don't think so.
Looking at the technical charts tell us a more intelligent tale. MSFT ditched on a huge volume surge indicating what we call a "Selling Climax". A selling climax suggests a last ditch effort by the bears to bring prices down. Such a selling climax indicates that the bears are expended and ready for the bulls to take over. Similarly, such a volume surge at a peak indicates a "Buying Climax" where the bears are ready to take over. A recent example is a "Buying Climax" on 12 Jan 07 leading to a correction in MSFT that lasted till now. I continue to see MSFT as Bullish. :)
MSFT Technical Chart By Worden Brothers TC2007 Charting Software
Voted Best Software By Readers Of Stocks & Commodity Magazine Since 1993!
What a surprise with MSFT last Friday. :) It was a nasty but interesting surprise.
All over the news wires, analysts are attributing the 2.44% drop to nasty Vista comments. But, is this the first time we are hearing nasty comments about VISTA?? Vista has been the center of controversy, nasty comments, hacks and security problems since the very first day... did all these comments finally accumulate into a 2.44% dropp on Friday? I don't think so.
Looking at the technical charts tell us a more intelligent tale. MSFT ditched on a huge volume surge indicating what we call a "Selling Climax". A selling climax suggests a last ditch effort by the bears to bring prices down. Such a selling climax indicates that the bears are expended and ready for the bulls to take over. Similarly, such a volume surge at a peak indicates a "Buying Climax" where the bears are ready to take over. A recent example is a "Buying Climax" on 12 Jan 07 leading to a correction in MSFT that lasted till now. I continue to see MSFT as Bullish. :)
MSFT Technical Chart By Worden Brothers TC2007 Charting Software
Voted Best Software By Readers Of Stocks & Commodity Magazine Since 1993!
Labels: microsoft, MSFT, msn, msn window, nasdaq, vista, window, window vista, windows, windows vista
posted by Jason Ng at 5:29 AM
2 Comments:
What about the volume peaks between 7 January and now? How to interpret those? Thanks!
Hi Stef,
Thank you for your question.
Volume peaks only indicate a buying or selling climax at a peak or bottom. I use other technical indicators to help me find short term bottoms and peaks.
As for volume surges happening in the middle or beginning of a trend, those indicates a concensus or agreement to the current trend, what I personally call a "Head Nod". Such head nods agrees and supports the new trend.
Even more significant than a head nod is the volume surge on 5 Feb that accompanied a break of the important 50MA. That is what we call a high volume channel breakout. That indicates that there will be more downside to come, at least for a few more days.
I am a technical option swing trader and looks for swing trends lasting 5 to 10 days. (Usually in the 5 days region) That is my analysis horizon. :)
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