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Microsoft driving the Q's

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If shares of Microsoft (NASDAQ:MSFT) aren't responsible for the bullishness in the NASDAQ Composite (COMPX) they're more than likely responsible for driving the QQQs in recent sessions. Today, shares of MSFT have taken out recent session highs and almost seemed destines to trade a bullish price objective from a vertical count on their point and figure chart. We actually used shares of MSFT as an example of calculation bullish and bearish price objectives at this spring's Option Investor Expo and it is rather remarkable how this stock acts on its point and figure chart.

Microsoft Corporation Chart - $1 box

In early April I though shares of MSFT should be on the watch list of many traders. Not only was the stock looking bullish on its supply/demand chart, but the stock comprised a major weighting in the NASDAQ-100 (NDX.X). Today's trade at $72 shows MSFT setting off a quadruple top buy signal and just like that the $75 bullish price objective from late March looks achievable. There's no "guarantee" that the stock will achieve the $75 level, but shares of MSFT have had a funny way of achieving both bullish and bearish price objectives. There's also no guarantee that the stock will simply stop going higher at $75 either. I would NOT want to be short this stock currently. First sign of trouble for MSFT on the point/figure chart would really be with a trade at $65 and a spread triple bottom sell signal.

Jeff Bailey
Senior Market Technician
www.PremierMarkets.com

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